5 PayPal scams you should be aware of


PayPal is a great safe and secure way to buy good and services online. Especially useful if you don’t want to hand out your credit card details.

PayPal is also a convenient way to be paid too. So if you list your item on sites such as Craigslist and a buyer offers to pay money into your PayPal account that is safe right ?


But how can scammer get a hold of your money if its in your PayPal account?

They 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: The 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 sipping 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 get 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 apologise for their mistake and ask for the balance to be paid into their bank account.

The Reality: the scammer did indeed over pay 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 “over payment” amount you paid to their Bank Account.5 PayPal scams that allow scammers to steal your money and your items too

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 Scam

The Scam: The scammer send 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, they 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 Happen: 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.

In Summary:

PayPal wants to protect its legitimate customers and has 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:

Seller using PayPal Buyers 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

You ARE covered by PayPal Purchase Protection:

  • You bought a book, but received a DVD
  • You bought an item described as “new,” but received something that was used
  • You purchased 3 items, but only received 2
  • The item was damaged during shipping
  • The 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

more info is available here: https://www.paypal.com/us/webapps/mpp/paypal-safety-and-security

headline image from Shutterstock.com


  1. Paypal is a joke! They say they answer there e-mail in 24 hours they lie.
    Put $212 in bank account now is gone! I am going to pay my balance and close my account!

  2. Paypal and ACI are together a scam. Paypal sends them fake news and ACI sends you a letter of nonpayment. And goes after people. Paypal will not give you any help. They just play dumb

  3. I had an email from PayPal and it said there was some unusual activity in my account and wanted me to click onto the link and update my information. Looks like a scam to me. I logged into my account (not the one on the email) and there was nothing unusual. Definately a scam.

  4. PayPal seems to be biased against Suppliers and favouring the Buyer, without confirming the facts and not going through the documentary evidences, making the Seller to suffer his Business losses, Losses in Reputation & Productive time by DIRECTING THE BUYER TO RETURN HIS ORDERED & SUPPLIED MATERIAL.
    Such return in our case was directed by PayPal unwarrantedly and taking the benefit the Buyer returned the Deficient Material in Numbers, Accessories and having different Sl. Nos. of Units than supplied.
    PayPal is suggesting us to Resolve the issue for Deficient Return Directly with Buyer, who is not responding, keeping away from the matter, without getting Relief & Compensation to the Seller, who is not at all any Fault, as he supplied the material exactly conforming to the order from the Buyer, but opted to Return on false pretext, which PayPal accepted. The PayPal is so inclined towards the Buyer that he has overlooked the reason of RETURN BY BUYER, AS HE COULD NOT BE ABLE TO FIND ANY BUYER TO PURCHASE THE RECEIVED MATERIAL.

  5. there is no way for a non member to contact paypal to report that their email is being used fraudently. I have never set up an account but get emails telling me I have paid such and such an amount for a purchase. how do I contact these people????

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