Categorizing fraudulent charges on Paypal account

JoeBushJoeBush Member Posts: 5

Last year I had someone steal my paypal debit card number and make some big charges. I disputed the charges and won, but those charges (and the settlement amount) are still listed on the account history, both in Paypal and in Wave. I'm not sure what to categorize either of those transactions in Wave. Any ideas?


  • JoeBushJoeBush Member Posts: 5

    Am I supposed to just delete the fraudulent charges and the replacement credit?

  • JoeBushJoeBush Member Posts: 5

    Or should I create a new account and move the transactions to that? That'd be less destructive to the data in case I need those transactions later.

  • SamdSamd Administrator Posts: 560 admin

    That is a very interesting question @JoeBush , and also I'm sorry you had to go through that - disputing charges can be a pain. In regards to the payments still showing up in PayPal, if it would be possible to save a copy offline for your records I would recommend doing so, in case PayPal ever gets rid of fraudulent charge records that have been won on the user end.

    In terms of accounting for it in Wave, the simplest thing would be to delete the transactions. Barring this, have the transactions balanced out (i.e. charges incurred > charges reversed), or did PayPal only import the charges which is causing your account to show as unbalanced? If it is the latter, I'd categorize the fraud charges as an expense, and then generate an income transaction to balance them, categorized as a refund for the same type of expense. It may even be worthwhile to generate a specific fraudulent charge expense account just to separate them out (you can do this via Accounting > Chart of Accounts).

    If it is the former, you could do something similar, but just re-categorize the transactions rather than creating ones to balance out the charges. I think it'd also be worthwhile throwing into the notes that these transactions were incurred due to a hacked account.

    Hope this helps!

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