5 PayPal scams you should be aware of right now – even in 2020
PayPal is a superb safe and secure way to buy goods and services online – but there are PayPal scams you need to know about. The issue is that many of us assume that if you list your item on sites such as Craigslist or Facebook Marketplace and a buyer offers to pay money into your PayPal account you are safe right? Wrong.
Can PayPal scammers get a hold of your money if it’s already in your PayPal account? Yes, they certainly can!
Here is how they can not only get your money but also keep the item they bought from you too:
Here are the PayPal scams:
1. Shipping Address Scam
The Scam: This PayPayl Scam involves a scammer asks for the items to be shipped to a specific address and money is paid into our PayPal account. You send the item to the required address.
The Reality: The delivery address is an invalid address and the shipping company can not find the location to make the delivery. After several attempts, they flag the item as undeliverable on their system. The scammer then makes contact with the delivery company giving them the new address where the parcel can be delivered to.
What happens: The scammer gets the item and then files a complaint with PayPal that the item was not delivered. You have no proof that it was indeed delivered as the transaction detail shows the original address. PayPal Seller Protection only covers the shipping address that PayPal has on the system and therefore not only do you lose the item but also the money.
2. Over Payment Scam
The Scam: the scammer makes a payment into your PayPal account for more money than the item is worth. They apologize for their mistake and ask for the balance to be paid into their bank account.
The Reality: the scammer did indeed overpay for the item and the money does reflect in your PayPal account.
What happens: when you pay the mistaken over amount into the scammer’s bank account, the scammer lodges a complaint with PayPal saying their account was hacked and they did not mean to make a payment to you. PayPal reimburses them their money and you are out of pocket for the “overpayment” amount you paid to their Bank Account.
3. Fake Email Scam
The Scam: The scammer sends you an email from PayPal showing that they paid the money into your PayPal account. However, PayPal is holding the money until you send a Tracking Number for the shipment and then the funds will be released.
The Reality: PayPal does not work as an escrow service and does not hold customer’s money nor does it get involved in shipping or tracking numbers. The email is a fake email.
What happens: The scammer hopes that you rush out and ship the item to them, email them the Tracking Number and then they string your along with excuses such as “the money will only reflect once the package arrives”. At that stage, it is too late – they have your item.
4. Phishing Email PayPal Scam
The Scam: Scammer sends you an email from PayPal showing that the funds have been transferred into your account and once your click on the confirmation button the funds will be available to you.
The Reality: the “confirmation button” takes you to a fake PayPal looking website where you log in with your username and password to “confirm” the transaction.
What Happens: As soon as you enter your username and password on the fake PayPal site, the scammer gets these details and is able to log into your real PayPal account and make payments or withdraw your money.
5. Hacked PayPal Scam
The Scam: PayPal sends you’re an email saying money has been deposited into your account. You log into PayPal and the money is there. You ship the item.
The Reality: Weeks later you are notified by PayPal that the money has been withdrawn from your account due to fraud.
What Happens: Scammers hack into other people’s PayPal accounts (as with the Phishing scam above) and use those accounts to make payment. When PayPal discovers the hacked account, they reimburse the money under certain conditions.
Final word on PayPal Scams:
PayPal wants to protect its legitimate customers from various PayPal scams and so it has an amazing buyer and seller protection programs. However, as with any financial institutions, there are rules to stick to in order to be covered b the protection plans. Here are some of the rules that you need to be aware of when using PayPal:
A seller using PayPal:
Seller Protection does apply only if:
- Ship to the address on the Transaction Details page. If the item was sold through your site, make sure you’re shipping the item to a confirmed address.
- The item sold must be a physical, tangible item that can be shipped. This means intangible items such as digital goods and services aren’t covered.
- If we request documentation or other relevant information, we ask that you respond promptly (typically within ten business days).
- Your permanent address (listed in your PayPal account) must be in the United States.
For “Item Not Received” cases:
- The payment must be marked “eligible” or “partially eligible” on the Transaction Details page.
- You must provide online tracking to be eligible for protection.
For “Unauthorized Payment” cases:
- The payment must be marked “eligible” on the Transaction Details page.
- You must provide Proof of Delivery or Proof of Shipment as described below.
Seller Protection does NOT cover you if:
- Claims, chargebacks, or reversals filed because the item is significantly different from how it was described (e.g. you described an item as “new,” but sent a used one).
- Intangible purchases like services, digital goods, etc.
- Items picked up locally or in person.
- Transactions made through PayPal Direct, Virtual Terminal, PayPal Business, or PayPal Here.
- Instances where you receive multiple payments for an item.
- Claims filed directly through an eBay account.
- Prohibited items such as drug paraphernalia, ammunition/firearms, or counterfeit goods.
- First Class Mail International, since the receipt only shows the address the order was delivered to – not the customer’s address.
More info here: https://www.paypal.com/us/webapps/mpp/security/seller-protection
Buyers using PayPal – beware of these fraud PayPal rules
You ARE covered by PayPal Purchase Protection:
- You bought a book, but received a DVD
- Purchased an item described as “new,” but received something that was used
- Acquired 3 items, but only received 2
- The item was damaged during shipping
- Item is missing major parts (that the seller didn’t report)
- You purchased an item described as authentic but received a knockoff instead
There are NOT covered:
- Real estate
- Motorized vehicles
- Custom-made goods that aren’t received
- Industrial machinery
- Prepaid cards
- Items that violate our policies
- Anything bought in person (not over the internet)
- Send Money transactions to friends or family
- Disputes filed more than 180 days after the purchase for item not received and significantly not as described claims
- Unauthorized transaction claims reported more than 60 days after the transaction date of the transaction
- Items that were described accurately by the seller
Info is constantly being updated on the PayPal scams and fraud, so please check this link for more info.
Note: if you are in South Africa, be aware of these Mandatory PayPal rules too