Problem Solved: I don't recognize this PayPal transaction -- do I still have to pay it?

What's this $1,203 charge on Isaac Benzadon's PayPal account? And why won't PayPal reverse the charge? Isn't he covered under PayPal Purchase Protection?

Q: I recently had a $1,203 charge on my PayPal account that I didn't recognize. It was for a transfer transaction of 992 euros plus fees. I never authorized the transaction.

I reported it to PayPal's Resolution Center. PayPal responded, "After reviewing your case, we found that this transaction was not unauthorized and hence couldn't be covered under PayPal Purchase Protection. We've noted the account changes you reported with this case." PayPal closed the case.

I asked PayPal to reopen the case and they denied it. I asked why they allowed the transaction to go through, but PayPal ignored me.

There's nothing consistent about this operation with my payment history. I normally use PayPal for amounts under $100 and to pay for eBay transactions. I never transfer money, never used euros, and have never done a transaction with the recipient.

Also, whoever did this transaction tried to buy something from Dell for the amount of $899 and my bank denied the operation. Every attempt to re-open the case ends with the same answer: No. Could you help me? -- Isaac Benzadon, Miami

A: PayPal owes you a clear answer about this mysterious transaction. And if it can't tell you why it authorized the payment, it should reverse the charge.

If only it were that simple.

First, let's take a look at PayPal Purchase Protection, which promises the "peace of mind you deserve." It does offer protection against fraudulent purchases, noting that you should "Contact us if anything seems suspicious so we can help you protect yourself from fraudulent charges against your account." But look closer. The program only applies to purchases, not money transfers.

It looks as if someone got their hands on your PayPal password and then went shopping. If you haven't already done so, I would change your password, and change it often to prevent this from happening again.

PayPal should have flagged this transaction. It doesn't match your normal purchase patterns. As you noted, you've never sent euros to anyone. PayPal's fraud detection systems aren't nearly as robust as your bank's. If I cross a state line and buy gas, my credit card alerts me. PayPal doesn't bat an eye.

I think what's most upsetting about your case is that PayPal closed your case without further discussion. You could have appealed this to an executive -- I list the names, numbers and email addresses of key PayPal executives on my consumer advocacy site, Elliott.org. I'm not sure if an appeal would have done any good. PayPal seemed determined to keep your case closed.

So I decided to ask about your case. Although PayPal didn't disclose the reasons, it reversed the charges on your account.

========

Christopher Elliott's latest book is “How To Be The World’s Smartest Traveler” (National Geographic). Get help by contacting him at http://www.elliott.org/help