It's been said before, but it's worth repeating. Conferences are a high risk business operation. For every SXSW, there's a thousand "Learn to Buy Real Estate with No Money Down" conferences at the Ramada Inn next to the airport. Paypal is not in the business of assuming your risk. They are in the business of processing payments while mitigating their own.
> Whatever happened to "caveat emptor"? If you're attending a real estate conference at a Ramada Inn, you weren't defrauded - you're just an idiot.
What happened is that "you were an idiot" is not accepted by many any more.
Many people don't expect to pay for their mistakes, even if that means someone else paying instead, and the worst people for this are the sort of people who make a lot of mistakes.
They'll argue, they'll fight, they'll try force a chargeback on the credit card payment, they'll do anything they can to avoid taking the cost of a mistake - if nothing else works they just keep on and on and on and on and on at everyone involved until someone gives them a full refund just to make them shut up and go away (as the admin time arguing back can become more expensive than the refund and taking them to court for harassment is hardly a convenient option). Some will even sometimes try taking you and/or the payment processor to court. Yes the case will probably be laughed out, but someone has to go through all the hassle until it gets laughed out, then (unless you are in a "loser pays" country) counter-sue to get your legal costs back.
And then there is the negative PR they can try to drum up - if they are successful here that can be much more costly than a refund.
Caveat emptor doesn't work if the emptor is a very loud, very persistent, fuckwit with entitlement issues (or just a scammer). Which unfortunately is a large enough segment of the general population to be a significant problem.
What happened to it was that credit card companies discovered that they could gain additional customers by removing that risk. The end result is now that most or all credit cards cover the cardholder in the event of a fraudulent purchase.
Feel free to run your own conference where "caveat emptor" is the rule for buying tickets, but you won't be able to take credit cards or various other forms of payment for it.
> What happened to it was that credit card companies discovered that they could gain additional customers by removing that risk. The end result is now that most or all credit cards cover the cardholder in the event of a fraudulent purchase.
What happened was that after defrauding customers became common practice, Congress passed laws regulating the credit card industry and putting the fraud onus on the party with the most ability to prevent it, the credit card issuer.
I didn't look into it deeply, but from the law I could find, it appears that liability is only limited by law in the event that the cardholder never authorized the transaction.
For this particular case, the cardholder authorized the transaction, and just didn't get what he expected to get. Maybe that's covered by a different law I didn't find?
The Fair Credit Billing Act, a revision of the Truth in Lending Act, specifically covers this:
"(3) A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction. "
Basically that's saying that if you ordered it, but the vendor didn't deliver properly, that counts as a billing error and must be handled like any other billing error - the credit card issuer must conduct an investigation, in writing, document everything, and can only bill the card holder for the amount in dispute if the card issuer is fully satisfied that the goods were provided as ordered. So the card issuer is in the business of adjudicating fraudulent disputes, whether they want to or not, which gives them a strong incentive (because they're going to be stuck with the fraud) to reduce and prevent fraud in the first place rather than passing it off to the card holder.
If the buyer needs to be aware, then so does Paypal - and they take steps accordingly. I feel sorry for anyone whose account has been frozen by Paypal, but if they didn't take steps to manage their risks, they would experience more fraud. And if they experienced more fraud, they would pass those costs along to everyone.
