Folks, PayPal is being sued and now there may be developing an elaborate reverse hoax on the net that may prevent you from collecting damages. But as of this writing, the whole process initiated by the letter to PayPal users is very fishy. It almost looks like it has been made to look like a hoax on purpose.

This situation started with a message from a “Ted S**” with this message:

BEWARE: Identity Thieves are using this scam to steal money from your PayPal account. It is a cleaver Human Engineering trick as many people might not be able to resist getting into the act of suing a large company. Even if you don’t have a PayPal account, this type of scam (called Phishing) is found all over the internet. This is why you should never, ever send personal information when requested from an email.

Below is the response from PayPay that describes the email at the bottom of this note as a Phish scam. The FAUX Paypal email is very believable however they are attempting to steal your PayPal identity so they can spend your money.

Just delete this email!!

Ted

Attached to that was this dubious message which was attributed to PayPal.

Dear Ted S**,

Thank you for bringing this suspicious email to our attention. We can confirm that the email you received was not sent to you by PayPal. The website linked to this email is not a registered URL authorized or used by PayPal. We are currently investigating this incident fully. Please do not
enter any personal or financial information into this website.

If you have surrendered any personal or financial information to this fraudulent website, you should immediately log into your PayPal Account and change your password and secret question and answer information. Any compromised financial information should be reported to the appropriate parties.

If you notice any unauthorized activity associated with your PayPal transaction history, please immediately report this to PayPal

Now it’s possible that some person at PayPal just sends out form letters since there have been so many complaints of past spoofing. BUT THIS WHOLE THING COULD BE AN ELABORATE HOAX TO KEEP PEOPLE FROM JOINING THE LAWSUIT. And if that “letter” from PayPal is legitimate and can be duplicated, then a serious honesty situation may be underway. I would guess it to be a mistake, not done on purpose, if it actually came from PayPal. That said, the header on the letter to S*** says “From: Paypal.” The only explanation here is that PayPal was required to send the letter from its servers on behalf of the lawyers and nobody at HQ got the word.

When you look into it a lawsuit is indeed underway and the lead attorneys are owners of the redirect website attached to a lengthy email PayPal customers are getting. In fact the long note looks too elaborate to be a phishing scheme when short hoaxes work best. Also there is no current running hoax on any of the hoax boards that monitor scams. This situation is peculiar. You’ll see if you get a letter. Ok.

Girard Gibbs & De Bartolomeo LLP. Here is the announcement for the lawsuit. The website handling the suit is here and it’s on a slow server that appears to be swamped.

Here is the last PayPal fraud scheme as of this writing as reported by FraudWatch International

Now the problem I have with this situation is that on the letter sent by the attorneys they use a PayPal logo, a PayPal “from” header, and the link clearly says you will be linking to http:/www.paypal.com/settlement. When you execute the link you go elsewhere. Why make the user think they are going through Paypal.com when they are going to some crappy server which is apparently in New York. I have calls into the law firm handling the case asking these specific questions. I’ll post the results on the blog.



  1. Alfred Poor says:

    John, you’re correct about the redirect, but it happens on the PayPal server, not from any mysterious code embedded in the email letter (or at least, that’s the case with the letter I received). If you go to http://www.paypal.com and get on the site, then add a “/settlement” to the address, it will take you to a page on the PayPal site that announces that it is redirecting you to another site. And then you’re at the lawyer’s site.

    Another point is that the forms that you are asked to fill out at the claim site — or at least the one I filled out — asked only for my email address and the approximate date that I opened the PayPal account. It did not ask for any of the type of identity information that phishers seek, such as password, credit card number, or bank account information. It was the absence of a request for this private information that led me to suspect that the whole thing was real, and not a hoax.

    I look forward to hearing what you find out about this.

  2. PayPal says:

    ABSOLUTE RUBBISH. You are taken to PayPal’s site in a secure environment and from there directed elsewhere.

    This is CLEARLY NOT a hoax.

  3. Stoney says:

    Your link is as wrong as you insinuation that this settlement is bogus. Ebay and paypal have both put out press releases about it.

    Your URL— http://www.settlement4paymentsonline.com

    The correct URL —– http://www.settlement4onlinepayments.com/

  4. Sandy Lane says:

    There’s a lot of info on this page where this suit started from.

  5. Sandy Lane says:

    There is a lot of information on the site where this suit started.
    http://www.paypalsucks.com/forums/showthread.php?fid=3&tid=5223&old_block=0

  6. Arjun Singh says:

    I got this email too, briefly scanned it, and deleted it. Email generally is a pretty bad way to send out a mass message, unless you know the from name personally. Bit of a dilemma, I guess, for those involved in promoting the class action. Best they can do, and it may be enough, is to put it through the mainstream press and the online ‘geek’ networks like Slashdot, Boing Boing, etc.

  7. John C. Dvorak says:

    I corrected the faulty URL which I had typed in by hand and got juxtaposed. I’m not insinuating the suit is a hoax, I’m insinuating the suit is real and the thought that the suit is a hoax is THE hoax! Geez, read this stuff please!.

  8. Cyber Lucky says:

    I was buying dog treats in bulk from an Alaskan Husky up in Ancorage using eBay last fall and we had a real difficult issue with Paypal. It seems that the class action suit should include dogs. I got an email from this Bloodhound in Alabama that had her Paypal account cancelled for no reason by Paypal. Now if this suit continues, I want in on the settlement. Please forward my e-check to http://www.animalrescue.org in Pittsburgh.

    Woof,
    Cyber Lucky

  9. Cyber Lucky says:

    Thanks Blog Master John for posting my programmed comments. As a cyber dog, I wasn’t certain if I would be accepted here. You should see how Paypal treated me! I recently demonstrated a prototype device, which was about the size of a Milk Bone biscuit, that lets two people exchange electronic business cards by shaking hands. It’s great for class action lawyers. I’ll let you shake my paw, but you won’t get a business card. I’m having a second device installed this weekend that controls the voltage of the second signal to my brain to be inversely proportional to the measured voltage in my wet nose. The tech people aren’t sure if my wet nose will cause a malfunction. If it does, the duty cycle which is controlled by the second device as a function of the measured voltage will need adjusted in my BIOS. This is a simple adjustment transmitting an additional power signal from the first device to a third device coupled to my said body, the additional power signal being transmitted at a different frequency than said power signal transmitted from the first device to the second device. My tech says he has it covered! I’ll let you and the readers know how it all works out.

    Woof!
    Your buddy,
    Lucky

  10. Michael Cannali says:

    To err is human – but
    To really screw things up takes a computer
    To really screw-over a mass of suckers big-time, it
    Takes a banker with a computer and a lawyer

  11. James Dermitt says:

    John,
    f-secure has a good index of hoaxes at this site!
    http://www.f-secure.com/hoaxes/hoax_index.shtml

  12. Tammy S says:

    I need co litigants!! This is real!

    I Billed customer via Paypal email billing, customer paid via Paypal email billing, 90 and 99 days later (two separate transactions, 1=2700 1=3500) customer decides to go into his own bank acccount and reverse the charges. Customer is a bank employee, did not file proper chargeback claims, but instead basically took the money back on his credit card. So since November 2006 I have been trying to get this resolved to no avail. After contacting local law enforcement, news media, customer’s bank, Paypal, the constant suggestion was to sue the customer, so I did. Even after I won the first case (he wrote a check too for a separate repair then closed the account) Paypal refused to “believe” or “assist” me, instead they sent me to collections for the money my customer owes. In addition, when my customer reversed his charges and noted his account, the $6000+ negative wound up somehow putting me in the chexsystem so I am unable to open any new bank accounts in order to keep my funds safe from Paypal. I sued the customer for the $6100+, won, faxed that judgement to Paypal, they replied with “we are unable to dispute this chargeback any further” go after the buyer. Er Go, my search for an Attorney, AND I FOUND ONE!

    I retained an Attorney who wants to pursue the Class Action against paypal.

    I need people who want to help me fight them.

    Make sure you tell him which State you are in.

    So here is his email:

    fg@sandiegolegal.us

    My Paypal esclusive email addy is paypalclassaction2007@cox.net if anyone wants or needs to verify validty.

    Send him an email of your story/situation and put “TAMMY SCOTT” in the subject line.


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