Ken Ballasy
4826 Sycamore Ave
Trevose, PA 19053
December 6, 2006

To whom it may concern,
I am writing to you in hopes that you will consider airing a story very pertinent to this time of year. It involves Ebay and PayPal, two of the largest and busiest companies on the internet at this time of year.

Executive summary:
1. Ebay transaction takes place through legitimate Ebay functionality for the sale of an 8800 Diamond Ring.
2. Paypal transactions take place to pay for the item through legitimate functionality.
3. Paypal accepts Payment, posted to sellers account.
4. Paypal then freezes payment after the ring has already been shipped and received by buyer.
5. Paypal reverses payment and refunds buyer due to fraudulent transaction.
6. Ebay, Paypal, Law Enforcement, Senators, Attorney Generals and Fraud investigators all take no ownership for the issue, action on the issue, or attempt in any way to catch the perpetrator or look into the issue.

On Sunday November 5, 2006, I posted an auction buy now listing on Ebay for my wife’s 2.25 total weight Ladies 14k Gold Diamond Engagement ring from a previous marriage. The listing included a “buy now” price of 8500.00. It is not uncommon to see expensive items like this on Ebay. On Tuesday, November 7, 2006, I got an email from Ebay that someone had purchased the ring.

Next, I got an email from Ebay that stated a buyer had requested my contact information and they supplied it to the buyer via email. Ebay requires that you maintain valid contact information in your account; however I was never told they would give it to anyone, Ebay communication is normally through Ebay, anonymously.

Next, I got a request for shipping information and total cost from the buyer. I supplied the information to the buyer via email through Ebay. I got no email back.

I got a call from the buyer, using the name on the Ebay information request I received earlier and we discussed the total cost, 8800.00 and the requirement to pay through PayPal. He also requested that the ring be sent overnight because he was going away and needed it to get engaged.

I verified their Ebay rating, it was in good standing, and verified their Paypal verification, all in order. I verified that all emails during the transaction were legitimate and had been sent through Ebay and Paypal, no sign of phishing activity.

Within a half hour the payment was posted to my Paypal account. There was one payment for 8600.00 (ring and shipping) and one for 200 (Paypal fees). I reviewed the payments and requested that the balance in the account, 8800.00 minus the fees be transferred into my checking account, standard procedure through Paypal. All transaction requests were accepted. Up until this point the transaction was perfect. Now the problems began.

I shipped the ring overnight, via FedEx, and gave the tracking number to the buyer over the phone no less than 4 times that afternoon. I checked the next morning and the ring had in fact been signed for at the buyers address, another fine electronic transaction through Ebay.

NOT!

Now the fun begins. Almost 24 hours after the transactions were completed and after the ring had been shipped and received, I got an email from Paypal saying the transaction was being investigated as fraudulent, and they put a temporary hold on the money. Paypal then requested the details of the transaction so that they could investigate the transaction for fraud, and I supplied them all the information. On November 9th, I got an email from Ebay saying that they were administratively withdrawing the bid from the buyers account as there was a possibility it was fraudulent. No phone calls, no sense of urgency, just emails.

Anyway, 1 week after receiving the email from Paypal stating the money was put on temp hold, I got an email from Paypal stating that they had determined the payment to be unauthorized and they had reversed the transaction. They refunded the money back to the buyer, whose account had completed the transaction in the first place. All via email, no live people.

I tried contacting the buyer via his cell phone and was bale to get him to answer. Knowing this, I contacted law enforcement thinking we might be able to get this guy via cell phone tower. They could locate the phone through the cell phone tower used.

At this point I contacted the New York Police as the buyers address was supposedly on Brooklyn NY. The 90th precinct discussed the issue reluctantly and basically told us it was not their issue, it is a Pennsylvania issue since the transaction occurred there and unless we came into the precinct, and they would not take a report or help in any way.

We contact the zoning department of New York City, and were told that the address that was delivered to was not a valid address.

We contacted Senator Clinton’s office for support and were told it’s not a federal issue so she would not get involved, again, not even a discussion.

I contacted Paypal and gave them the live cell phone number for their “fraud” investigators, only to be brushed off and never contacted about it again.

I contacted several outgoing Senators in Pennsylvania, who at least discussed the issue and told us that there really is no law that defines jurisdiction in these types of cross state internet transaction, and there was really nothing that they could do.

We contact the Attorney General of Pennsylvania and several internet fraud investigation websites, logged complaints, and either have not heard back, or were told this is no their issue.

The only ones that listened, took a report, and told us they would look into it, but could not promise anything were the Bensalem Police, my local township law enforcement.

Now I figured I better call Paypal and find out from a person why the transaction was reversed. Every time I called Paypal, I got was a canned, smug almost rude response that next time I should make sure my transaction was eligible for the SPP. No explanation, no details.

Through all of this, the Ebay account the Paypal account were never frozen, were never removed from use, and to this day are still live, with the fraudulent information live, even though Ebay and Paypal say the issue was addressed.

In one conversation, I was told that Paypal “never” gets hacked into, never has and never will, and that if someone used an account to make a fraudulent transaction, it was the account owner’s problem, not theirs.

I managed to somehow email the real owner of the Ebay account through Ebay and got him to contact me. He is in Massachusetts. His story is that someone hacked in to his account and attempted to purchase approx. 80,000 of rings and other items before he or Ebay noticed, it was too late. They took actions and reversed things; however the account owners’ credit cards were not used in these transactions.

At this point I really don't know if I have been cheated by the buyer or by Paypal. P made a mistake in taking my money away; I don't think the SPP should absolve them of making mistakes.

My legal questions are these:
1. The buyer indeed made the transaction through Ebay and Paypal valid accounts, with all emails legitimate.
2. The payment was made to Paypal, which requires a legitimate bank account or credit source for the transaction to occur. In other words, it is not accepted unless the charge goes through.
3. If the transaction was fraudulent, why did Paypal in essence refund the criminals money for the transaction, leaving me with no money, no ring, and no recourse.
4. It’s almost the perfect crime, that can be tried as many times as you like until you get one, then you move on to the next account.
5. Does Paypal ever admit they made a mistake?

Where I am at with this now:
· I have a wife who has not gotten out of bed since the transaction was determined to be fraudulent. She thinks I am to blame and has made my life miserable. All I hear is how you could do this, how could you not check, how could you be scammed.
· No one wants to take responsibility to investigate
· No one wants to admit even partial responsibility for the errant transaction
· No law enforcement agency (other than Bensalem) is interested.
· I have no ring
· I have no money
· And I have issue related to my own finances that this income was going to address.

People should know, people should understand, people should be warned, and Ebay and Paypal must be accountable.

Thank you,