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Update 5-28-07

Yesterday on 5-27-07, I verified with PayPal’s resolution center that Bloggerwave’s account was now safely in good standing. Furthermore, PayPal no longer feels that Bloggerwave’s account was utilized in a fraudulent manner. For more information and clarification on this situation, I’d recommend reading the article I published on the subject yesterday. This update is provided for future readers so that they will be able to view this article in context with a situation and understanding that has evolved over time.

Original Article Here

I’d like to respond to some of the activity and results that have transpired since my first two articles on this subject.

1. Article 1 identified that PayPal had informed me that Bloggerwave was using either a bank account or credit card account fraudulently
2. They took the money in my PayPal account and sent it back to Bloggerwave due to this fraud Issue.
3. They also sent me an email encouraging me to turn Bloggerwave in to the US authorities for fraud. (Which got printed in Article 2)

PayPal first told me about the problem on May 11, shortly after I received my first payment from Bloggerwave on May 8 as I mentioned in the article 1. They requested information from me to prove that I had provided services to Bloggerwave. I believe they also contacted Bloggerwave at the same time, but I can not confirm this.

Eight days later on May 19th, PayPal closed their investigation and reversed Bloggerwave’s payment to me along with several other people, which I learned after publishing articles 1 and 2.

I published article 1 on May 21st (I had attempted to send a message to Bloggerwave on the 20th or 21st, but they only had two contact forms for sales and tech support and neither seemed to fit the situation(I never received a reply from that message).

I did not hear from Bloggerwave until the evening of May 24th, when they commented on article 1. In that comment, they left an email address, and I immediately responded to the email to attempt to open up a dialogue with Bloggerwave through a more direct means than their website contact us form.

Since then I have received 9 emails from Bloggerwave at a rate of about 4 per day.

They indicated that they have had PayPal fix their account and that the account has been fixed since May 24th, 5 days after PayPal reversed the payment transaction and 3 days after PayPal had told me that it was reversed due to fraud.

Now, since receiving Bloggerwave’s comment on my blog and their emails over the last 2 days, I have not had the opportunity to speak with PayPal directly. I have received a replacement payment from Bloggerwave.

I will contact PayPal today to determine if they will actually let me keep this new payment from Bloggerwave and determine if they still find the account to be fraudulent.

Clearing up some loose ends

1. When I spoke with PayPal, the bloggerwave email address had not been verified, I checked. Today, you can check and see that their payment address is now verified. The verification from PayPal shows that the account was created on May 7, but does not indicate when it became verified.
2. I asked PayPal at the time (I mentioned it in article 1) if checking the PayPal verification status would have helped me to avoid doing business with a fraudulent company, if it would have helped prevent receiving a fraudulent payment, if it would have prevented my funds from being reversed. Their answer was “No” it would not help. The verification is just a check, an additional layer of security, but not a fool proof way to protect an account from fruad.

What do I think is going on given the information I have today?
I suspect one of the following possibilities:

1. PayPal could have been correct the first time when they told me that the account did not authorize the transfer from the bank account or credit card to the Bloggerwave PayPal account, which later paid me and several other people.
2. PayPal could have been wrong the entire time
3. Bloggerwave may have not responded in a timely manner to PayPal’s request for additional information following their initial payments. keep in mind they did not set up that payment address until May 7. Maybe someone at Bloggerwave didn’t take the email seriously. Maybe the email went into a spam folder. Maybe they saw the email, but suspect a fraudulent email from PayPal (It could have looked like a boilerplate phishing email for PayPal information).
4. Bloggerwave may have not taken the problem seriously until I wrote my article. I published the article on the 21st and did not hear from Bloggerwave until the 24th. They should have seen the transaction funds going back into their account on May 19th (like I did). I was not the only account to experience reversals, so they should have seen others as well. They did not respond to the contact us from submission that I provided, but they did leave a comment on this blog and at that point, it definitely appears that they got very active about straightening the mess out. (Any actions they took prior to that are not visible to me, maybe they took actions and maybe they did not.)
5. Its possible that the call center representative named Felisa did not know what she was talking about, had bad information in the computer system, or interpreted good or bad information in the computer system incorrectly. When I spoke with her I asked many of these questions over and over again, and I asked for many qualifying and clarifying responses trying to determine if Bloggerwave was involved in or victim of fraudulent activity. Felisa did definitely seem to know what she was talking about. She seemed very intelligent, gave answers that made sense, gave answers that did not contradict each other, and seemed to take the situation very seriously. She also seemed to understand all the implications of what she was telling me. Based on what I know today, I suspect that she was either telling the truth as she knew it at the time with the facts she had at the time, or she is a world class actor. I’ve worked in credit and finance for many years and have wrote many papers on electronic transactions and money laundering. I have studied PayPal since they were created. I knew the right questions to ask when I was on the phone with Felisa and she seemed to know what she was talking about as well. I don’t think she was just some run of the mill telemarketer.

Next Steps
I will call PayPal again to find out if they will let me keep this latest payment. I will share with you the results of what I learn. I will share those results as fast as I can, even though I am travelling (its a holiday here). I’ve been sharing updates as quickly as I can and answering questions offline with many dozens of bloggers. I will continue to do my best with the information I have.

I have received several emails from Bloggerwave that indicate that this situation will probably be cleared up and that Bloggerwave could be OK. However, given the fact that PayPal called out their payments as fraudulent, I do have to be very careful. The burden of proof is now on Bloggerwave to show the world that they are a credible, reliable company.

There were several things about their start up that made many dozens of bloggers question Bloggerwaves integrity. This situation has not helped Bloggerwave. I can not speak to their motives if they are honest or dishonest.

At worst PayPal was originally correct. At best Bloggerwave has been a victim of a mistake by PayPal. Somewhere in between its possible that Bloggerwave was not fully prepared to go live with their online payment system and these problems that developed since May 8th (when I received my first payment and a day after Bloggerwave set up their account) could have been avoided with more rigorous testing and with more timely communication with PayPal and the blogger community.

When I know more, you will know more.

2 Responses to “Bloggerwave Update: Fraud, slow response to PayPal, or is PayPal in the Wrong?”