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PayPal Gives to Charity with eBay Users’ Funds

eBay sellers are generous, but they like to give their permission before their money is donated to charity. This week, some eBay users discovered that PayPal was making unauthorized donations to charities through eBay Giving Works, taking the money right out of their PayPal accounts.

eBay spokesperson Ryan Moore told EcommerceBytes on Thursday, “We’re on top of this issue that occurred yesterday for a limited set of customers. We’re working quickly to automate refunds to those impacted, and we’ll be reaching out to them directly as well.”

We’d asked if it was a technical issue or a security breach. He replied, “This was a result of an internal technical issue (not a security breach per you email).”

We asked Moore in a followup email how this was possible – it’s pretty scary for users to think eBay/PayPal could take funds out of their PayPal accounts in error. He did not respond.

Readers who reached out to us told us that eBay and PayPal customer service reps were unaware of any problem on Wednesday. One told a reader their account must have been hacked, though that was not the case.

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eBay users also complained on Twitter:

Head Zombie @ZombieGifts tweeted to @AskeBay on Wednesday evening, “Any info on “PayPal Giving Fund” glitches today? I was billed for a donation I never authorized. PayPal was no help!”

Nick Curran @NickNickcurran tweeted, “Ebay keeps taking money from my paypal for some donation. It just happened 5 times today. Wtf?”

A reader said they received two emails from PayPal, one an official donation receipt to the Red Cross, the other was a transaction email for the donation with the description “eBay seller fees.”

Another reader wrote, “Yesterday, someone managed to generate 7 payments to eBay Giving Works from my PayPal account via the 3rd party authorization on eBay.” The seller described dealing with PayPal and eBay reps and not getting answers that reassured her the problem was fixed and would not recur.

When one user tweeted @AskeBay on Twitter that the eBay website wouldn’t let him “de-link” PayPal from eBay donations in his account, they wrote, “You can unlink by going to Account > Paypal Account > Remove link.” But the user replied, “False. You cannot unlink PayPal from the “donation” account, that’s where your server was hacked.”

While eBay denied the incident was related to a security breach, it did not explain what kind of technical issue could result in PayPal making unauthorized withdrawals from its users’ accounts. PayPal did not respond to our inquiries at all.

So what were sellers told? “Recently there has been donations made from your PayPal account which initiated from an eBay billing agreement that was previously established.”

Along with the words strung together to look like a sentence, the email included an apology “for any inconvenience that this may have caused.”

PayPal has been having a rough week as far as technical issues go, with some users reporting a few days ago that they had been unable to make payments for purchases they wished to make. Users also reported getting payment holds placed on transactions that had been impacted by a technical issue on June 14th (PayPal acknowledged that technical issue). Or should we say, PayPal users have been having a rough week.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.