Since its start eighteen years ago, PayPal has become one of the de-facto ways to send money online. While it is a very reliable service by itself, scammers can still find loopholes and escape routes to dodge PayPal’s anti-scam precautions. Here are a few ways scammers cheat people on PayPala and how to avoid them.
1. Fake “Money Received” Emails
Affects you as a: Seller
One scam involves someone agreeing to send you money for an item. Usually, PayPal will send you an email to notify you when you receive money. This trick, however, involves the scammer sending a fake email to you impersonating PayPal, saying that the money has been sent. The key is to trick you into thinking they have paid, prompting you to send the item. The scammer has your item, but you get no money.
If you’re selling via a third party such as eBay, you’ll usually see a confirmation of payment there. Regardless of if you’re using a third party or not, you can always check the PayPal site for your balance and transactions to see if the money has come through. If you don’t see anything on either site, don’t send the item and forward the fake email to firstname.lastname@example.org.
2. Refunding “Overpayments”
Affects you as a: Seller
You’re selling an item and have already agreed on a price for the product and postage. When a buyer sends you the money, you notice they’ve paid slightly more than agreed. The buyer will claim this was an accident or that it’s for additional shipping fees via a company they’ve selected. Either way, they will then ask you to wire the extra money, either to them or their “shipping company.”
The buyer may be purchasing your item with a stolen account or credit card. If the account is flagged as compromised, the bank will take back any fraudulent transactions, including the payment you received for your item. Because you wired some of the stolen money back out of your account, the scammer gets to keep the product and the extra money, leaving you with nothing.
If you notice someone has overpaid, you should be able to refund them through PayPal before you send the item. If you can’t, or you already accepted the payment, it’s worth opening a support ticket with PayPal to figure out what to do next.
3. Changing Delivery Details
Affects you as a: Seller
You’ve successfully sold an item when the buyer wants to change how the package is sent. Perhaps they want you to use their shipping company account, as they claim it’ll be cheaper. The problem is by putting the delivery in the buyer’s hands, you give them the ability to exploit it. If you use their shipping service, they can tell the company to redirect the package elsewhere. If you send to ab address different than the one on PayPal’s transaction details, it’s out of PayPal’s domain.
When the buyer recovers the item, they then dispute the sale and say they never received it. Usually you can dispute this with a recorded delivery tied to the address mentioned on the PayPal transaction. However, because the seller shifted the delivery away, you either have no verification or verification of delivery to a totally different address than the one listed on PayPal’s records. As such, you can’t argue your ground.
Always take charge of the delivery. Use your own shipping accounts and don’t allow the buyer to wrestle the responsibility off of you. If someone legitimately gave the wrong address and wants it changed, resolve the issue via PayPal so they know of the address change.
4. Using “Friends And Family” for Business Payments
Affects you as a: Buyer
You’ve agreed to buy an item when the seller has a great idea. You could send money the normal way, but that incurs PayPal fees they’d rather not have you pay. Instead, they give you their email and ask you to send the money via PayPal Friends And Family, which is free of fees.
Unfortunately, the fees are there for a good reason; it’s so PayPal can protect you! Friends And Family is meant to be used for people you know well. There are no fees included because it’s a simple money transfer. It’s designed to be used for gifts, payments for favors, or simply paying back people. There’s no transaction tied to the transfer, so there’s no coverage or protection should the seller not send the product.
As much as it feels bad to pay fees, it’s worth it! Always do a proper transaction when buying items, and never use Friends And Family for anything more than paying back someone close to you. It’s also against PayPal’s user agreement for a seller to ask for a Friends And Family payment for a business transaction, so report it if you can.
5. Attempting To Dodge a PayPal Transaction
Affects you as a: Buyer, Seller
The best way to get around PayPal’s security, however, is to dodge it altogether. This scam usually starts with you entering a transaction where the product advert says to use PayPal. However, the person you’re dealing with will suddenly renege on the original deal and try to change the payment method, such as to a bank wire or a different payment service. This may be accompanied with an additional financial bonus to sweeten the deal.
If you entered a deal with PayPal in mind, don’t back down. If someone cannot meet you on the original terms, do not do business with them, no matter how alluring their counteroffer is.
Scammers Aren’t Your Pal
Even though PayPal is the most trusted payment service on the Internet, there are ways around its security. Now you know how scammers operate, the tricks they use, and how to dodge them.
How often have you seen PayPal scams on the Internet? Have you witnessed them first hand? Let us know below!
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