A PayPal mystery


A loyal reader of this column has come to me with a problem that I, in turn, am submitting to all of you. He sells downloadable software over the Internet but lately some customers have been ordering, paying, downloading, yet not requesting the required unlocking key to use their software. Money is piling-up in the reader’s PayPal account and he is starting to worry this is some kind of scam. But if it is, it’s a scam that’s new to me.

The first such order was placed on June 4th and there have been 20 such customers so far, though some of those customers have placed double orders so the total amount is $1,758. The reader is in the USA but the orders have come from Belgium, Norway, Switzerland, France, Germany, Austria, Sweden, Japan, and Israel. Nobody has requested an unlocking key and nobody has requested a refund.


Now it gets stranger. All the orders used legitimate-looking e-mail addresses, yet all except one address bounced back as invalid. The PayPal transactions, however, all went through. PayPal is scratching its digital head, too, saying they have no idea what’s happening.

As an experiment the reader raised the price of his product from $79 to $790. No sales happened at the higher price but then an order went to an alternate distributor who charges $99. Again, no request for an unlocking key. The alternate distributor supplies my reader with an IP address for each transaction and the bogus (is bogus even the right term for this?) order that came through this channel was from, which is apparently in Belgium.

Fearing there’s another shoe to fall my reader has pulled his money out of PayPal except for enough to cover refund requests -- should they happen -- from these weird transactions.

Have you seen anything like this before? What’s going on?

13 Responses to A PayPal mystery

  1. Mike McLoughlin says:

    Could it be that there is a glitch in the software being sold that makes it not require the key?

  2. Ckought says:

    My first thought is money laundering. Use dirty money to pay for a good or service, which then masks it as legitimate money. The one(s) doing the laundering may have inadvertently purchased the wrong thing, which is causing the money to go to the reader's company instead of the intended shell company.
    I'd think PayPal would be able to track the credit cards that the money is coming out of, contact those financial institutions, and verify that the cards aren't stolen / hacked.

    • psycros says:

      I wondered about that myself. We already know this goes on with completely fake products being bought online using Paypal. After a not-too-quick period of time a refund
      is processed and the Paypal account in question will now be pointing
      to a different bank account. Since Paypal is a trusted entity and is used
      for lots of small transactions, there's less scrutiny on deposits
      coming from them, and nobody but them has a record of which bank accounts were involved.

      It could also be hawala bankers using Paypal
      refunds as a zero-cost Western Union.

  3. Captain555 says:

    Arrange for the guys to sell you a copy for $1 and then try to install it, see if it ask for a key.

    • Charles says:

      Also, is it always the same product, or does this happen with multiple products? Standard, Pro, or Enterprise versions?

      A bit more fact finding is in order.

      • Daniel Bucherer says:

        Hmmm, but how would that explain that all email TO the buyers bounced? This points to more than a mere glitch...

      • Charles says:

        One of the emails didn't bounce.

        Of those that did, I'd want to see them and we know many email hosts have systemic problems from time to time. The orders, presumably, were placed using those email addresses, were they valid and then not, or were they invalid to begin with and yet paypal processed the order? Did the email supplied to the alternate distributor likewise become invalid? Open questions.

        I agree the bounced email addresses are a clue, but that doesn't invalidate the need to test if the product is requesting keys.

      • Christine Zamarripa says:

        <<o. ✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤✤:::::::!ja688s:....,......

  4. MyDisqussion says:

    If it's money laundering, $879 dollars a month seems like a very slow way of doing it. Maybe there is a flaw in the software. A google search might identify what it is in that case. I would like to know whatever the resolution is.

  5. roborat says:

    maybe there's just people out there that has too much money and buys a lot of stuff and not enough time to use them.

  6. Bob Grant says:

    There doesn't appear to be much logic to this... Unless it's a rather rich fan, and only wants to give in small transactions.

  7. cyberguy says:

    I smell fish in this story. Here we have a downloadable shareware vendor that expects purchasers to ask him for their keys after they have paid him. Does nobody see something wrong in that? If I download shareware, and want to license it, I go to their site and license it via paypal. Paypal provides my VALID email address and I expect the vendor to issue my activation key automatically. I will never ask a vendor for my key. If I have paid my license, and I do not get that key in a reasonable mount of time, I demand a refund. Period.

    Could it be your vendor acquaintance does not understand how his own activation/licensing system works?

    • JPRacer77Qc says:

      Exactly. When I pay a small developer for software my key is automatically sent to me. I don't ask for it. I only ask, like you said, if I do not get that key in a reasonable mount of time.

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