I know people have already said this but take it from someone who buys and sells on eBay often, if you listed it with a bad ESN and opted for no returns then you are not obligated to do anything. He should have been paying attention when he bought it. It's pretty much his lost. He wouldn't win a claim because he's returning for a reason you had in the listing. Here's what I would say, keep all your communications through email and not the phone. That way both eBay and PayPal can track them. Because what he says on the phone my be different in email if there was a case. For instance, on the phone he could say "I didn't know the ESN was bad". But then he could raise a case that says the item doesn't work. And you'll now have to prove it does work. So keep everything in email.