Messing with PayPal is scary.

Thanks, Wellsdakota..So much for this silly Paypal trick...I am an ebay seller, so I will never mess with Paypal...

This does sound like a good way to get PayPal to lock up funds or shut down accounts. I could build 4 inside of (trustworthy) family, but it seems like more is way better. Mechanics don't fully make sense to me, but I don't have a PP card.

The other methods I've come across are all clever uses of existing products for personal benefit. And all of them are legal.

What's been explained here sounds shady at best and downright illegal at worst. This is what PP says about backup funding sources:

https://www.paypal.com/us/webapps/he...topicID=&m=ARA

There should be no doubt that linking someone else's debit card as a backup funding source for your PP account is considered fraudulent and against the PP T&C. Unless I have misunderstood something.

"Fraudulent" is a strong word, implying that there is something illegal going on. If you have any professional, legal knowledge about this, I would encourage you to share it.

To me, I would say that this is taking advantage of a loophole that is no doubt against the T&C of paypal, but I would highly doubt that this could ever be considered illegal. Worst case, Paypal freezes your account and shuts you down, but you'll get your money back.

Almost everything that's posted on these boards is against the T&C of something. Heck, Chase even says that opening credit cards for the sole purpose of earning points is against the T&C of their service, and they can shut you down for it.

So to me, this seems to be just one more trick that will work for a while until it doesn't. Same as everything else around here.

Thanks for posting, WellsDakota (and others)!

Loophole? PP would get their asses handed to them in court over this because Debit Cards can and do affect credit scores. Not only that but every single person in the middle of this chain could steal (yes outright steal) money from the final PP account that is using a bank account as a funding source.

This is a far, far cry different from using prepaid cards with other names on them. You are the one funding that prepaid card with your own money and there is no credit score effects nor any legal liability of the person who's name is on that prepaid card for funds lost or gained on said card.

The same is not true of a backup funding source that is a debit card. You are using someone else's credit/bank account to make purchases for yourself. If you think there is a legal "grey" area involved in this scam (and this truly is a scam) then I have a bridge to sell you. All it takes is one person in that chain to get aggravated and report you to authorities for identity theft and you're up a creek. And if you do this in family member's names you can have a direct negative effect on their credit report if you fail to pay off any balances they might incur.

I'm not saying you'll get arrested or have any legal action taken against you if all goes well and it's only PP who finds out. I don't really know. But this is far closer to criminal activity than anything else I've seen discussed here.

Interesting. Clearly, one of us is reading this method waaay wrong. As I understand it, stealing money from other Paypal users is not the method people were talking about. If that's how you're understanding the method, then I agree that it would be illegal. But I'm pretty sure that's not what people are talking about.

Having somebody else's Paypal account as a backup to your own account is not illegal. If I have permission to use my SO's paypal (or bank account) as a backup to my paypal card and I make a purchase, that's not stealing from anybody, and as I understand it, it's not illegal anywhere.

If you think I'm mistaken and this is going to get us thrown in jail, I would be interested to hear the legal reasoning. I'm not a lawyer, so I understand that I could be incorrect in my beliefs.

10 people set themselves up in this chain. 9 of them have funding back ups of other people's PPBDMC, the last person in the chain has to have a funding back up that will actually pay the amount charged otherwise you'd get into an infinite loop and that would cause issues with the system. So every single person who is higher in the chain than the last PP account that is actually funding the purchase could swipe their card anywhere they want and the funds would come out of the final person's PP back up. Effectively stealing money from the final PP account.

Of course I am just operating on the little bit of information that was leaked, that information could be misguided or incorrect which would make everything I'm saying a moot point. I don't really care what anyone else here does anyway. I'm just giving a warning that if I am understanding this correctly this could have legal ramifications for a variety of reasons. So be wary.

where does the 4% come from?

I really value my PPL account as I buy and sell very often so this sounds like method I wouldn't want to risk my relationship with, however, I am interested to know what it's all about. If someone would be kind enough to PM me with some details, that would be greatly appreciated.

A number of snark posts have been removed and members dealt with accordingly so please refrain from posting more or members may lose their posting privileges if they find they are unable to play nicely with others.

tcook052
MS Forum Moderator

For those who don't quite get the method, this method capitalizes on the backup function when using a PPDC whenever there is not enough funds in the account to cover the purchase. Since PP allows you to utilize another PPDC as a backup method, each additional person acts like a middleman, or a straw, that processes the transaction. Since PPDC get 1% for each purchase, each person who the transaction goes through gets 1% for their trouble. The last person has to have either the funds in their account, or a bank account, or a PP credit card set up. Lots of things can go wrong.

Paypal is not a dumb company. Do at your own risk.

If I Linked in a complete circle so PayPal continually pulled from the same X accounts repeatedly, would I get infinity cash back and break the Internet?

No Paypal volunteers except my wife. Therefore, I can have only two accounts and thereby earning only 1% if I understand this correctly. I put my wife's PP Debit as a funding source for my account and then I use my PP Debit to buy a MO (won't by Vanilla as my old Amex blue still functions). I won't earn anythings since it is a pin related transaction but she will earn 1%?

I guess my question is can someone have multiple PP accounts with multiple debit cards to resolve the no PP family volunteers issue?

Don't use PayPal backup funding source. You will get shutdown, like Doctor of Credit.