Lawyer confirms: Paypal savings trick is perfectly legal

A lucrative money scam is doing the rounds on the internet. Customers of the PayPal payment service are said to have saved up to 40 percent when processing their payments over the internet by converting their German credit card to broken Argentine pesos (ARS) instead of euros.

40 percent saved? This means that if, for example, I buy a voucher of 100 euros from an online retailer via Paypal, only 60 euros will be debited from my account thanks to the favorable exchange rate.

But how does the fantastic currency difference come about? And is it legal to use this “hole” as a German credit card holder?

Tourist dollar makes pesos trick possible

Bargain foxes in this country are making smart profits from the Argentine pesos. The reason for this is sad: the Argentine government introduced a very attractive exchange rate for payments with foreign credit cards in December to bolster the ailing economy. Tourist dollars are also spoken of contemptuously. This exchange rate is now being exploited by Paypal customers.

That’s what the lawyer says about the Paypal trick

Is that legal? Yes, says lawyer Christian Solmecke, who specializes in advising the internet and IT industry. Solmecke to t-online: “If the contract for your own credit card allows such a thing, it is possible in principle. Here you may have to check with your own bank whether something like this is possible. It is easier to change the currency directly with Paypal. However, this is only once a month.”

Customers who use the Paypal trick need not fear being sued in any way. “There is no fraud, as no one has been duped here, but only a loophole has been exploited. Computer fraud is also out of the question. Finally, credit card abuse could be considered if the provisions of the credit card contract are seriously violated. However, Visa’s terms of use do not even prohibit such transactions,” explains Solmecke.

Meanwhile, users discuss their experiences on the MyDealz forum. The PayPal trick would work with these cards: Vivid, DKB, Barclays, ING, Amazon Visa, Klarna. Some reported on Tuesday that the amounts to be written off were reserved only by their banks. So could it be that shoppers are waking up from their buying spree and subsequent cost correction?

“In any event, Visa’s Terms of Use do not prohibit such transactions. Therefore, pure credit card payments with Visa may not be reversed. Visa must recover the difference from the Argentinian government. However, users are already reporting credit card blocks,” explains lawyer Solmecke.

Money makers could be given a rough wake up call

But Solmecke also warns: “If customers have paid with a Visa card stored with Paypal, at least pure transfers, which earned money from ‘nothing’, could be reversed.”

The background to this is that, according to PayPal’s terms and conditions, “currency conversions may not be carried out for speculative transactions…or any other activity…the purpose of which is to earn or generate money primarily based on exchange rates”.

According to the terms and conditions, the consequence of such a violation would be the withholding, cancellation or reversal of a transaction. Solmecke: “But that should only relate to pure transfers and not to purchase contracts in which money is not primarily earned, but goods are bought.”

MyDealz users have a tip for anyone worried about subsequent bookings from their bank: Don’t buy anything online that you can’t actually pay for in full.