I admit that situation sucks. PayPal only lets you dispute anything through them for upto 45 days after the purchase date. What happens with a charge back is that the credit card company that the buyer funded the transaction with granted buyer a charge back, and took the money back from PayPal, so PayPal took it form the seller. If the buyer's credit card had not granted the chargeback, that would have never happened. I completely agree that is a shitty situation, and like I said, I don't agree with all their poilicies, I was just trying to be informative.
The transaction was made through PayPal. The chargeback was granted. Thus, the payment was granted back to the credit card company from PayPal. Instead of fighting the credit card company as they should have, PayPal then recouped that loss by charging the original seller because it's easier to bully the seller than fight a huge conglomerate. In this case, the seller ended up in collections and thus their credit damaged BY PayPal due to a situation in which PayPal should have taken the loss to begin with.
Had the seller been informed of their rights, they should have challenged the debt and taken PayPal et al to court over it. Most people won't. I would have. My time costs less than a team of lawyers. Said team of lawyers, in preparation for such things must analyse the cost efficiency of the situation. If it is more cost efficient to settle, they will. I guarantee you, in this case, I would have won without a fight, as would have the seller had they chosen to do so. The thing is, most people won't, knowing what they possibly may face, and the legal team at PayPal knows this and counts on it.
So do I, and I count on it, knowing that their time is worth way more.
Doing my part to fuck the system back,
kat