Did Bloggerwave make a Payment with a Fraudulent Bank Account or Credit Card?

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

Bloggerwave launched a company offering to pay bloggers for reviews on their websites.  At the time of their launch many bloggers questioned the similarities of Bloggerwave’s policies and web design to that of PayPerPost.

Some bloggers on the PayPerPost forum and other boards outside of PPP even questioned the possibility that the PayPerPost website had literally been copied from a content perspective.

About 2 weeks ago, I received my first payment after completeing a Bloggerwave assignment.  The payment was for the amount of $10.  Shortly after that PayPal initiated an inquiry into the payment.

They requested information and proof from me that I expected the payment.  As the receiver, PayPal, an Ebay company, considers me the seller and Bloggerwave the Buyer.  They are used to dealing in transactions in relation to physical goods.  This not despite the fact that PayPal originally formed as a way of exchanging money and was later acquired by Ebay.

I provided the information requested and indicated that I had provided a service as a freelance blogger writer.  I expected PayPal to confirm the situation and free up the funds. 

Over the weekend, PayPal closed their inquiry.  They reversed the funds and sent the $10 back to the original account.  Note, I did not say sent the $10 back to bloggerwave. 

Calling PayPal for more information

I pulled up the history on this situation.

I phoned PayPal at this point.  I wanted my money and suspected that PayPal was just being a little dense.  The representative at PayPal corrected my assumption.  They indicated that the email address

payment@bloggerwave.com had been connected fraudlently to either a credit card number or bank account that had not authorized the payment.  Ergo, someone setup a paypal account and linked it to someone else’s bank account or credit card number.  Or possibly, someone had hijacked an existing paypal account and added the email address

payment@bloggerwave.com

Eitherway PayPal was sure that fraud was involved.

PayPal Does not Protect Services

PayPal will protect sellers if they are defrauded from buyers if and only if a physical exchange of goods takes place that can be verified with tracking information.  (Like a delivery receipt signed by the buyer)

A permalink for a blog article is not something they would count and so services even if they can be tracked in cyberspace do not count.  In this regards, I have no recourse to receive my payment from the company that calls itself Bloggerwave.  (I did attempt to contact them, but as of this article I have not yet received a response.  If I receive a response I will provide a copy in a follow up article.)

What does Bloggerwave gain from this?

From this point on, I can only provide speculation.  However, lets suppose that a person, group or company was up to no good.  Lets suppose that they gained access to someone’s credit card or bank account.

They could then sell advertising services to paying customers and collect money.  They could hire bloggers to write articles to promote those companies.

Instead of paying bloggers with the revenue from the paying customers, they could pay in with the fraudlently controlled bank account, credit card account or paypal account.

The company then pockets the entire revenue from the paying client. 

This type of scam has a short shelf life.  They can fool a few bloggers for a few weeks and iterations but once they lose their payments they will not work for this firm any longer. 

To Continue more Gullible Bloggers Needed

Since you can only fool bloggers once (possibly in a batch at a time of articles) this firm would need to continue recruiting and preying upon new bloggers.  That means that in this case, bloggers need to get the word out and warn each other about the potential of this scam.

Additional Perils for Bloggers

Bloggers do not have to worry just about losing a little time and effort on an article. 

They have to worry about their own personal information.  A company or person that doesn’t mind stealing a credit card number or bank account could use such a service to harvest personal information about bloggers.

They could use this personal information for identity theft.

They could setup a new faux service using the bloggers paypal email address (if they hacn hack thepassword at PayPal).

Bloggerwave did not require a Tax Identification number, but they did request some other softer information.  Several bloggers indicated in the forums that they provided inaccurate birthdates andother information when testing Bloggerwave.

Protection Steps

Do not provide your personal information to a company that you do not know or do not trust when you sign up for these types of services.  They typically need to collect your tax information if they pay you more than $400, but they do not necessarily need that information until you get to that level.

Use different ID’s and passwords.  Don’t use the same old tired password and ID that you use for other accounts.  If you sign up for one of these services and you are not sure about them, give limited information up front until you can build trust witht he company.

I asked PayPal if there was any way I could verify the buyers credentials up front. 

There is a PayPal mechnism that can verify a PayPal buyer but it is not perfect.

I keep a PayPal provided seal on my site at Softduit Partners.

Example Code

https://www.paypal.com/us/verified/pal=brett_bumeter@softduit.com

Providing an email address at the end of the code:

https://www.paypal.com/us/verified/pal=

enables you to check and see if the person is PayPal verified.

This verification does require a higher level of confirmation of identity.  It could be subverted, especially if someone completely stole someone else’s identity or if they successfully gained inappropriate access to a PayPal account that was already verified.

update

It is possible that if PayPal takes funds back out of your account, that your PayPal account could go negative. Its also possible that this negative balance could result in an automatic ACH debit from your bank account or even from your credit card if your credit card was used for a higher level validation

16 thoughts on “Did Bloggerwave make a Payment with a Fraudulent Bank Account or Credit Card?”

  1. Fraud? What are you talking about? How?
    I work with Bloggerwave and yes, Paypal was VERY slow in the uptake in regards to payments. All of the sudden they wanted to know everything about the company as we where received a TON of bloggers and had to pay to a large number of people everyday.

    The last part wasn’t resolved with paypal until this week – FINALLY!!

    Everybody will now be able to receive their payment and continue blogging :-)

  2. Just to fill you guys in. The account: payment@bloggerwave.com have been activated.
    We received the following email from Paypal, dated may, 24. 2007:

    Dear Ulrik Svane,

    Thank you for contacting PayPal in relation to the limitation that was
    placed on your account, my name is Gemma.

    Firstly I would like to apologise for the inconvenience that this
    limitation has caused you Mr.Svane and we greatly appreciate your
    co-operation.

    After reviewing your account it shows that the restriction was reviewed
    and your account has been restored.

    I do sincerely apologise for any inconvenience caused. Please let me
    know if you need further assistance.

    Sincerely,
    Gemma
    Resolution Services Department
    PayPal, an eBay Company

    Copyright © 1999-2007 PayPal. All rights reserved. PayPal (Europe) Ltd.
    is authorised and regulated by the Financial Services Authority in the
    United Kingdom as an electronic money institution. PayPal FSA Register
    Number: 226056. PayPal (Europe) Limited is registered in England & Wales
    with registration number 4056498 and registered office at Hotham House,
    1 Heron Square, Richmond Upon Thames, Surrey TW9 1EJ.

    End of email.

    Furthermore everybody where paypal have reverted the payment have received their payment by now. And that is FROM THE SAME PAYPAL ACCOUNT: payment@bloggerwave.com

    All this is due to a mistake from paypal. I we at bloggerwave hope that you will all continue working with us.

    I hope you will respond to this message…..

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