15 PayPal scams you should know about


Author: Clark Tos
2022-10-12 10:52:01

PayPal, the largest online payment platform, is also a prime target for fraudsters. Learn about the types of PayPal scams.

What are the 15 forms of payment scam targeting the buyer on PayPal?

A woman who discovers she has been the victim of a PayPal scamCredit: fizkes

PayPal is the most popular online payment service in the world. This platform offers buyers and sellers an easy and convenient way to exchange money from anywhere, and in many currencies. But with the large volume of transactions and the growing number of users, PayPal has become a breeding ground for criminals looking to profit fraudulently. Here are 15 different forms of scam related to PayPal and which should make you more vigilant.

1. The problem with the buyer's or seller's PayPal account

This scam starts with an email that claims to have been sent by PayPal to let you know that there is a problem with the recipient's account or with your own account. The email tells you a link you need to click on to solve the problem. In the vast majority of cases, this fraudulent link redirects you to a page that looks like the real PayPal site, but if you look closely, you will notice that the domain name is different. If you log in to this page with your username and password, scammers will have immediate access to your PayPal account. This kind of phishing email is the most frequently used way for scam pros.

2. The PayPal promotional offer scam

The fake promotional offer is also a form of scam used by hackers. The latter send you an email offering you a discount or a financial advantage with a link that directs you to a fake website to try to obtain your identifiers.

3. The 'money is waiting for you' scam on PayPal

Put your bank card on the internet. Credit: Istock

Fraudsters send you an email telling you that a certain amount is available in your PayPal account. If you don't see the money right away, it must have been blocked for security and other reasons. To be able to access this sum, they send you a link leading to a page in which you must give your identifiers. This is how they get their hands on your account to empty it or to steal your identity.

4. The 'advance payment' scam on PayPal

Fraudsters tell you by email that you are the beneficiary of a large sum of money, but to release the funds, a payment in advance is necessary. These types of scams play on emotions. Even if you have doubts, you might be tempted, especially if the scammer is very convincing. It then prompts you to pay a certain amount of money as a transaction fee or any other misleading expense. Once the payment is made, you will never hear from the scammer again and your money will be gone.

5. PayPal shipping address scam

The scammer seeks to interact with you directly through the PayPal platform in an attempt to steal from you. He pretends to be a buyer and will ask you to ship his item through a shipping company of his choice, arguing that the transaction costs are cheaper or that the service is faster. If you accept, the scam buyer will contact the carrier and redirect the package to another address. Then they will contact PayPal to file a claim for non-receipt of an item and request a refund. The buyer will have no way to prove that the item has been received or not, but will still have to pay the delivery costs.

6. The shipping label scam

When purchasing online through PayPal, the malicious buyer can provide their own prepaid shipping label. To convince you, he can say that he benefited from a reduced rate. By using this fraudulent shipping label, the buyer can redirect the package to any other delivery address and then claim never to have received the item to request a refund for their transaction from PayPal. This shipping label may have been acquired via a stolen credit card.

7. The fake PayPal shipping address scam

Make sure to use paypal to avoid being scammed. Credit: Istock

This online buyer scam involves providing the seller with a fake shipping address which is usually untraceable. When the delivery person fails to deliver the package to the original address, which is false, the buyer provides him with a new authentic address. The package is then redirected and delivered, but the buyer still files a complaint with PayPal claiming never to have received the package in question. Since the final delivery address does not match the one indicated at the time of the transaction, PayPal may grant a refund.

8. Hacked PayPal account scam

Fraudsters use hacked accounts to purchase an item and make a payment. The seller, unaware that it is a hacked account, begins the procedures for the transaction and the delivery. Unfortunately, when PayPal discovers the hack, the funds are already withdrawn from the account.

9. The 'alternative payment method' scam on PayPal

For this scam, the scammer asks the seller to use another payment method which is not allowed on PayPal. This is usually the money transfer option for PayPal relatives. This may sound attractive, as transaction fees are reduced. The problem is that this type of transaction is not covered by PayPal's protection program. That is to say, in the event of a complaint or fraud, no refund will be made.

10. The 'overpayment' scam on PayPal

The buyer sends the seller more than the agreed price, then requests a refund for the difference outside of PayPal, claiming it was a mistake. Once the transfer is complete, the fraudster initiates a dispute over the original transaction on PayPal claiming that their account was hacked. PayPal can then refund the full amount.

11. The 'pending payment' scam on PayPal

Using Paypal on a mobile phone. Credit: Istock

For this scam, the buyer asks the seller to provide a tracking number otherwise PayPal will not release the money to their account. He claims to have made the transaction. If you accept, the scammer will receive the item and disappear without payment of the good.

12. Fake charities

Scammers create fake charities and use PayPal to collect donations. This is common after a natural disaster where many people look to charities to donate or help with operations.

13. The Nigerian PayPal Scam

The Nigerian scam is a scam that consists of sending a false notification to the victims telling them that they have received a certain amount of money which would come from an inheritance, a lottery win or even compensation. The victim must then make an advance payment on PayPal, or even fill out a form with personal data , in order to receive the money. Confidential data will be added to a database, and can be sold on the dark web.

14. Scam linked to a “creative” payment system on PayPal

Here is a scenario that explains this scam: PayPal offers to make a transfer at a lower cost to a relative or friend. The scammers ask to receive a transfer this way so as not to pay the commission fees and promise a reduction in return. Unfortunately, this method is not protected by any protection program. Any user who sends a friends and family-only payment on PayPal may lose their money, as they will not be refunded by the platform.

15. Investment Scam

Fraudsters send an email to offer interesting money investments and attract victims into their net. Users who agree to invest lose their money quite quickly, because scammers withdraw the funds received the minute they were transferred.

How does PayPal protect users against scams?

The PayPal application in a phone Credit: NejauPhoto

PayPal offers two types of protections to its users:

  • PayPal Achat Protection

If an eligible transaction goes wrong (the carrier who cannot find the address, the seller who got the wrong product, a damaged package, etc.) then PayPal reimburses it in full. Buyers have 180 days to dispute a transaction or make a complaint.

  • The Protection of Marchands PayPal.

For sellers who accept payments through PayPal, the Seller Protection program allows them to keep the full purchase amount provided they meet the following criteria:

  • They have a primary PayPal address located in the United States;
  • They sell physical, tangible items;
  • They can ship to the address listed in the transaction details;
  • They can provide valid proof of postage or delivery.

Buyer: how to protect yourself against PayPal-related scams?

Securing each payment as well as your email linked to PayPal Credit: Galeanu Mihai

PayPal users should exercise caution and common sense to avoid being scammed. Here are some ways to protect your account against fraud.

  • Always be wary of links contained in an email;
  • Carefully review the sender's email address: PayPal only uses the @paypal.com email domain;
  • Ignore emails from PayPal that are not addressed to you by your name listed on your account. Formulas such as ' Dear customer ' or ' Hello PayPal user ' are typical of a scam attempt;
  • Ignore or delete messages from PayPal asking you to transmit confidential information (password, banking information, credit card, etc.) or to download/install software;
  • Never send money outside of PayPal for transactions conducted on the platform.