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 account you are safe right? Wrong.
Can 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 scams:
1. Shipping Address Paypal Scam
The Scam: This scam involves a scammer asking for the items to be shipped to a specific address and money is paid into our 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. Overpayment Paypal Scam
The Scam: the scammer makes a payment into your 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 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 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 you 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 site, the scammer gets these details and is able to log into your real account and make payments or withdraw your money.
5. Hacked PayPal Scam
The Scam: PayPal sends you an email saying money has been deposited into your account. You log into 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 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.
6. The Problem with your account email scam
This has been one of the most common scams that almost everyone has encountered. It’s an email disguising as a representative from Paypal saying that there is some sort of problem with your account. Sometimes, they’ll ask you to update your account to avoid the hassle of taking other unnecessary actions. They will often provide a link where you can log in to your Paypal details but will then be redirected to another website where they could steal important information from you or transfer your funds to their account.
Here’s a sample of the fake email:
“Dear Paypal User,
We have noticed some problems with our system. With this, our team decided to move to a new system.
Please be advised that we are requiring everyone to update your profile. Please immediately do so or your account may encounter major issues in the future.
You may update your profile here:
If you have experienced some issues prior to this email, our customer service is open 24/7.”
What you should do:
Do not click the link provided on the email. To make sure that the link is redirected to the Paypal website, hover your cursor over the link and check the URL at the lower left part of your screen – the URL can usually be seen on this part even without clicking the link.
To double-check its legitimacy, go straight to Paypal’s website and check for notifications regarding an account problem or profile update.
Never ever log in to PayPal from a link in an email.
7. Awesome Deal / You have won
Fraudsters commonly use email as a medium to reach their target people, luring them to click a link that would direct them to a fake website that is programmed to capture any information you will enter on it for personal gain. Nowadays, they also do promotional spoofs in the form of social media posts. They will pretend to be selling something or offering a great deal to get your attention.
Here’s a sample promotional spoof:
“Earn payback cash or credit by verifying your account details!
What you should do:
Always check the URL of the website. Anything aside from the official web address of Paypal is more likely a scam. Just because the web address has the word “Paypal”, does not mean it is them. Paypal also does not use domains specific countries or regions such as “co.eu” for Europe or “co.uk” for the UK.
Paypal’s credibility can also be seen on how well and professionally they crafted their website. The brand’s voice is on point as well as the grammar and spelling of every text on it. The designs and images are of high quality and in line with the brand’s coloring and messaging.
Any grammatical errors, misspelled words, or low-resolution images could be a hint that you are on a fake website.
8. Fake charities and investment scams
Scammers are opportunists. They take chances in situations that involve your decision-making skills, particularly, playing your emotions. Posing as charities is their ace to swindle the money of their generous and well-meaning targets. Using the pandemic, scammers are trying to conn money to help anything from orphans who lost their parents, to food banks feeding the homeless, to people in need of medication that they can’t afford.
Another technique scammers us is offering investment opportunities such as “shares in a resort” or “cheap property”. They create elaborate fake websites where the “investment” is laid out and “…for a small deposit of only $100 paid via PayPal you can get in on the ground floor of the investment”
What you should do:
Follow your instinct when it comes to investment scams. Avoid any offer of a promising big reward in return for a small investment. You can check some government or private websites that can validate if the company is really existing and check their reviews as well.
The same goes for charities asking for a pledge or donation. Check if their organization is registered with the government.
Here are some recommended sites by Paypal:
9. Expedited Stimulus Checks
In the US, the government has issued a stimulus check to Americans due to the Covd-19 pandemic. Scammers are using this and creating fake emails offering to “expedite your stimulus payment for a small payment into their account.” Some generous scammers are even offering to refund the fee should they not be successful in getting your stimulus check.
Of course, the entire process is flawed and this is a scam to collect money from those who are desperately waiting for their money.
What you should do:
Use official IRS and government websites in order to inquire about the status of your check. Do not trust a broker who demands payment.
10. Covid-19 Home Test Kit
As corona tests are not readily available and people who are ill would prefer to be tested at home. Scammers are offering to send you government-issued test kits for a low price of $19.99.
Once again, this is one more PayPal scams, and all COVID and testing information should be gotten from your local health physician or official government or county sources.
How does Paypal respond to these Paypal Scams?
PayPal wants to protect its legitimate customers from various 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 by 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 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:
Custom-made goods that aren’t received
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
PayPal Scams are real
While Paypal and their IT team are continuously working to improve the security of their transactions and other services, it is important to stay vigilant and aware of the tactics that cyber criminals commit. While they know that most people will simply delete their emails, they count on the fact that a small percentage might read the email while being distracted and quickly log into the fake account revealing their username and password.
The golden rule is never to react to these emails. Always log in via their main URL and if indeed there are issues with your account, there will be a notification there with instructions on how to resolve the issues.
PayPal is clear on their policies and will protect the seller and the buyer when the protocol is followed. PayPal Scam info is constantly being updated on the PayPal scams and fraud site, so please check this link for more info.
Note: if you are in South Africa, be aware of these Mandatory PayPal rules too
The Techie Guy informs of recent Paypal scams and how you can avoid them.