How do PayPal users get scammed?

PayPal is considered to be one of the pioneers of online payment. It is one of the most secure ways to send and receive money on the Internet. PayPal has established itself as the best alternative to more traditional, paper-based money transfer methods (checks and money orders). It's simple to use, can be installed on any platform or operating system, and has global coverage, not to mention being firmly ingrained in the freelancing sector. Even though PayPal boasts its security measures, scammers always find a way to fraud people and make money.

What is PayPal?

PayPal is an American multinational financial technology company that operates an online payments system in most countries, allowing for online money transfers and serving as an electronic alternative to traditional paper methods such as checks and money orders. The firm charges a fee to act as a payment processor for online sellers, auction sites, and a variety of other commercial customers.

Popular Scams on PayPal

Now, let us check out the ways in which scams are carried out on PayPal.

Advance Payment Fraud

It's not uncommon for online criminals to swindle PayPal consumers via so-called advance payment fraud, a common Internet scam. Victims are notified that they are entitled to a particular sum of money, which might be an inheritance, a lottery win, or any other form of compensation.

The possibilities are unlimited, but regardless of the scenario, the victim will need to make a modest advance payment (in this example, via PayPal) and may have to fill out a form with personal information in order to collect the funds. Upon payment, the message sender vanishes, and any personal information revealed is stored in a database and may be traded on the dark web.

How to prevent − Do not send money or give your personal information to strangers. The majority of these letters contain several red flags, such as excessively large prizes or compensation, grammatical problems, a sender's address that appears to be more fit for a robot than a human, and so on. Pay attentive attention to every detail and don't make hasty conclusions.

Problems with PayPal Accounts

We have an issue in Houston. This con starts with an e-mail from PayPal claiming that something is amiss with the recipient's account. But don't worry; the issue may get resolved by following this link and logging in.

Now pause for a bit. That sounds suspiciously similar to phishing!

In 99% of situations, the link takes you to a website that appears almost identical to the legitimate PayPal site but on a different domain. When you log in from there, both your username and password are sent to the fraudsters.

In the most serious circumstances, resolving the purported account problem may necessitate the installation of a program "to assist in the restoration of access." It will, in reality, be a Trojan.

How to avoid the scam − Look for mistakes in the message and Web addresses that do not match the service's official address, and keep in mind that PayPal will never send you an e-mail with that sort of phrasing if there is a problem with your account.

Installing a security solution that protects you against phishing and online fraud is much easier − it will automatically detect harmful Web pages and stop them, even if you're rushing or distracted.

Scammers are now disseminating phishing links not just through e-mail but also through social media. Someone may, for example, create a Twitter account called PayPalGifts and use it to target unsuspecting customers. Of course, the account won't stay long, but it can gather a lot of user credentials while it's active.

Overpayment Refund Scams

Let's look at some of the methods fraudsters use to persuade individuals to pay them money nearly totally of their own volition. Overpayment scams are among the most popular in this category, in which a buyer gives a seller payment, but for whatever reason, sends more than the sales price. The buyer says it was a mistake and requests a refund of the difference, but the buyer cancels the initial transaction as soon as he receives it.

How to prevent being duped − Accidents sometimes happen, but overpaying is almost always unlikely, and it should always be a warning signal. In the event of an error, it is preferable for both parties to cancel the erroneous transaction and enable the payer to resubmit the proper amount while carefully inspecting every one, zero, and decimal point. If they refuse, call PayPal's customer service department immediately away.

Fraud Involving Delivery and Payment Cancellation

A delivery fraud is another popular ruse. When fraudsters masquerade as customers, they may urge a seller to ship products via the buyer's preferred delivery option, which they claim gives a discount. The thieves alter the delivery address before filing a complaint alleging that the products were never delivered.

Another possibility is that the delivery firm is a ruse, allowing dishonest buyer to reclaim their money using established legal channels for products provided in good faith.

Finally, address substitution may be used to perpetuate this type of scam: the customer offers a phoney address, and after multiple failed delivery attempts, the corporation asks them where they want their goods delivered. In this approach, they receive the shipment but submit a complaint with the vendor stating that they did not receive it. PayPal may trust the fraudster based on multiple reports of failed deliveries.

To prevent being duped, only use delivery services that have been directly confirmed by you or individuals you trust. Never ship anything until you've received money, and save all receipts.

"Creative" Payment Schemes

Honest individuals might be duped by shady money schemes as well. PayPal, for example, offers a money transfer service with discounted prices for family and friends. Scammers will sometimes request a money transfer in this manner in order to save commissions and promise a discount in exchange.

However, this technique is not intended to be used to pay for items, and no consumer protection program applies to such transfers, according to the platform's guidelines. Anyone who pays a "friends and family" payment to a fraudster can say goodbye to their money — and their products.

Scams of this nature also involve promises to send money by alternate methods that are ostensibly more convenient, cheaper, or better for whatever reason the vendor deems superior. In general, if the opposing side insists on anything like this, or begins spinning stories, or attempts to generate urgency (last opportunity to strike a deal, I'm travelling to Alaska in an hour to live off the grid for the next 20 years), something is probably wrong.

How to prevent being a victim of a con − Requests for alternative payment methods should be ignored. PayPal offers excellent protection procedures for both sellers and purchasers, but they only apply to regular platform payments.

Scams Involving Charitable Contributions and Investments

You may find people who send out phoney charitable contribution requests. It is fairly commonplace for such folks to use PayPal to accept "donations" or "contributions." Cancelling the payment won't help if the fraudsters collect the monies as soon as possible (which they almost certainly will), so double-check everything ahead of time.

During natural catastrophes and other force majeure occurrences, be extra wary of pleas for charity donations; be assured, scammers will always be there to profit from others' suffering.

Profitable possibilities, also known as investment opportunities, might present themselves at any time. The frauds are similar to those involving phoney charities, but they frequently include promises of huge riches with no specific risks. Of course, life isn't quite that simple.

How to prevent being a victim of a con − Investigate and verify intriguing offers. Check out the reputation of any charity foundation (or investment firm) to which you're thinking of donating. It's preferable if you have connections or colleagues who have worked with the organisation and can speak for its integrity, but you may also use sites like Charity Navigator, the Better Business Bureau, and Charitable Giving to verify charities on the Internet.

  • Never ship to an unfamiliar address, and only to the address specified on the transaction page.

  • PayPal's safety mechanisms do not cover the other money transfer methods offered by con artists.

  • Don't believe an offer that appears to be too good to be true; it most likely isn't.

  • Give out only as much personal information to the other party as is required for the transaction. Never disclose your password, and never download any extra software or questionable items were given to you over e-mail. PayPal does not operate in this manner.

How to Stay Out of PayPal Trouble

Let's consolidate and describe some broad guidelines to assist you to guard against the bulk of fraud, account hijacking, and other unpleasantness −

Look for red flags in messages like grammatical errors, attempts to elicit a feeling of urgency or danger, and e-mail addresses and URLs that differ from official ones (even by one letter).

Don't put your faith in communications blindly. Check your personal account on the Internet or in the PayPal app for any potential errors (this is especially crucial when it comes to notifications verifying the crediting of funds).

Updated on: 07-Feb-2022


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