How Does PayPal Handle Disputed Credit Card Charges?

[Bag_of_Mostly_Water]

The background:

I bought something from someone via eBay. Immediately after the auction closed, the person contacted me and requested I send payment to a specific PayPal account. As the email address associated with the eBay acount did not have a PayPal account (got that?), I stupidly didn’t think much of this. Sending money to a third account like this voids eBay’s buyer protection.

So, it’s now been three weeks and I haven’t received anything. The phone number associated with the eBay account is disconnected. The email address to which I sent the money has been suspended. I now have no way to contact the seller.

I have filed complaints with with eBay and PayPal. Both were sympathetic, investigated, confimed there was fraud, and said they can do nothing more under their rules. PayPal did say they would continue to attempt to recover the money. This does not seem likely.

My question:

I used my credit card to pay PayPal for this charge. I have called my credit card company and put this charge in dispute. I think this puts a hold on the payment to PayPal. If I understand the PayPal terms of service, I am obligated to pay PayPal. How will PayPal react to my disputing the credit card charge? Can I legally disbute a charge to PayPal when my problem is with one of PayPal’s ex-customers?

[Fear_Itself]

If a buyer initiates a chargeback on a credit card payment, the seller is charged for it:

PayPal User Agreement

By accepting a credit card payment, you agree that you are responsible for the payment if it is reversed. If such reversal occurs on a credit card funded payment made to your account, we will reverse the payment and debit your PayPal account balance to pay for the reversal unless the transaction is covered by the Seller Protection Policy. If there are insufficient funds in your PayPal balance, you agree to reimburse PayPal through other means, as described in the Payments (Sending, Receiving, and Withdrawing) Policy.

As noted, the only problem would be it the seller qualified under the Seller Protection Program, which it sounds like he does not, as he did not meet the following requirements:

[list=A]
[li]The seller ships to the address listed on the Transaction Details page. [/li]
[li]The seller can provide reasonable proof-of-shipment which can be tracked online. This documentation must show that you shipped to the address listed on the Transaction Details page.[/li][/list=A]

Sounds like if the credit card issuer refunds your paymnet, PayPal goes after the seller and leaves you alone.

[Markxxx]

PayPal will leave you alone if you go thru them first. They get real upset if you initiate a chargeback and don’t work with them.

I’ve done this because PayPal is hard to work with. Also it costs a credit issuer about $25 a chargeback so if you’re dispute is less than that they generally give it to you regardless.

Paypal got mad and “threatend” to close my account many times. They never did it yet.

Has the seller been NARU’d yet?

Fake info (address, phone etc) is grounds for that.

[Eleusis]

Required reading