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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39018
Experience:  Retired (mostly)
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I sold an item on ebay, the customer sent payment through paypal,

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I sold an item on ebay, the customer sent payment through paypal, I transferred it to my bank account and withdrawal it and received it in my hands from the banker. Shortly after, I sent out the customer’s product. Everything was fine until the customer filed a dispute with paypal, because the item was defective. My paypal balance was Negative -$3877.40. I contacted paypal and the seller and we came to the agreement that once the customer sends the product, I would refund their money. After I received the product, Paypal immediately refunded the customer with their own money; they didn't even wait for me to deposit the money the money back into paypal. I thought “fine no problem I'm going to give the money back anyways”. So I logged on to my paypal account just to find out that the balance went from negative -$3877 to -$3993. That’s when I refused to give them their money back. I have decided to wait for them to correct the balance before returning the money to them (paypal).

So here is the question I need an answer to and my main concern. If I decide to hold their money and not give it to them until the balance is corrected, and they are still demanding the money. Will they file criminal charges on me, and I could get arrested? Or will they just send me to a collection agency until I pay it off? You can visit if you are not familiar with them.
What you're describing is not a crime, in my opinion. PayPal didn't have to refund the money before you returned it to PayPal. And, you did not defraud the seller. You apparently have a dispute over the amount you owe PayPal. I don't know if the dispute is valid, but that's a far cry from a theft, which requires the specific intent to permanently deprive PayPal of its property.

That said, PayPal could certainly file a criminal complaint. Ultimately, it's up to the police to decide to arrest and for a district attorney to determine whether to prosecute someone. So, while I think it extraordinarily unlikely that you would be charged with a crime -- no one can promise that you won't be.

PayPal will send you to collections, and make a negative credit report against your account, if you don't pay.

Hope this helps.

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