Why was I re-billed £115.25 for a clearly fraudulent PayPal transaction?

An unemployed 18-year-old student was left £115.25 out of pocket for two months after his chargeback request was rejected by Nationwide Building Society, even though his debit card was fraudulently used for a PayPal purchase. 

Ethan Patterson, from Warrington, Cheshire, spotted two suspicious transactions from his current account in early November made out to two separate PayPal sellers, one for £8.83 on 3 November and one for £115.25 six days later.

He says this was despite never having a PayPal account, authorising the transactions or sharing his details with anyone. 

This is Money tried to contact the PayPal seller who ‘sold’ him more than £100 worth of goods on 9 November for details of the sale but did not receive a response.

Nationwide customer Ethan Patterson was £115.25 out of pocket after Nationwide initially ruled against him in a fraud case

Ethan contacted Nationwide two days later to complain about the payments, which were initially refunded through the chargeback scheme, a refund scheme operated by card operators American Express, Mastercard and Visa.

After being logged as a Visa merchant dispute his card was replaced, but the money for the larger purchase was once again taken out of his account after Nationwide said the seller of the goods, who This is Money is not identifying, insisted the sale was legitimate. 

Ethan kept the refund from the £8.83 purchase due to the fact the sum of money was so small.

In a letter sent to Ethan at the start of December, Nationwide said: ‘the merchant’s bank has let us know the payments are valid. As such, we’re not able to uphold your refund.’

The decision left Ethan, who at the time was working at a local garden centre after leaving college, once again out of pocket for £115.25. 

The money was taken out of his account on Christmas Eve, the same day he lost his job due to tightened restrictions as a result of the coronavirus pandemic.

Ethan and his mother Debra contacted This is Money four days after that letter from Nationwide, while he also wrote another letter to Nationwide on 21 December contesting their decision, although the building society insisted it had not received this.

After This is Money contacted Nationwide, it looked at his case again and said it should have been classed as financial crime as opposed to a merchant dispute.

There were more than 1.1million instances of ‘remote purchase’ or ‘card-not-present’ fraud, where criminals use stolen card details to make purchases like in Ethan’s case, in the first half of 2020, with victims losing £222million.

Our sister title Money Mail reported a similar scam a few weeks ago, with a fraudster using stolen debit card details to make more than £5,500 worth of purchases through a PayPal account they had set up in the victim’s name.

Having reviewed Ethan’s case, Nationwide’s financial crime team agreed to refund him the money on account of him not having a PayPal account and being a victim of fraud, as well as a £75 compensation for the delay he suffered.

A spokesperson told This is Money: ‘We sympathise with Ethan through what must have been an upsetting incident and apologise for the delay in reaching this outcome. 

‘However, upon reviewing this case, we are happy to confirm that we will be refunding him to the value of £115.25, to cover the monies lost.

‘We have also offered an additional £75 in compensation, which he has accepted.’

This post first appeared on Dailymail.co.uk