PayPal

PayPal In Depth

Sections on this page
  1. Types of Scams Targeting PayPal Customers
  2. Most Common Types of PayPal Scams
  3. How to Beat PayPal Scams
  4. Protection for PayPal Customers

PayPal is a money-transferring service. It essentially acts as a middleman, allowing you to transfer funds directly from your bank account to other individuals or registered companies without either party having to reveal personal bank account information. It also works in reverse, allowing businesses to accept these same types of payments from customers. In return, PayPal collects a fee off of certain transactions.

As one of the original online money-transferring services, PayPal has grown to become one of the most popular of these services globally. The ability to transfer money back and forth between international accounts through the platform is one feature that has made PayPal so ubiquitous.

Over the years, however, PayPal has steadily expanded its services. Besides paying out people or businesses directly, customers today can also extend a line of PayPal credit (purchasing something through the company and paying for it later, in increments, at a relatively steep interest rate). And contractors can also use the service to create and facilitate invoices, with the company handling the lion’s share of the tricky tax information.

The relative simplicity of it all has helped PayPal accrue more than 244 million users. But its profoundly financial nature has made the company all too tempting for hackers and scammers—PayPal is usually one of the most impersonated brands by scammers, along with Facebook, Netflix, and Microsoft.

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Types of Scams Targeting PayPal Customers

Services like PayPal have made so many aspects of modern life more convenient, whether it’s paying a friend or family member back for some borrowed money or having a faster and easier way to purchase goods and services from an online retailer.

But its ties to such sensitive information as bank account numbers and other transactional data have made PayPal scams all the more common among imposters and scammers. As such, it’s important to remember: For every bit of convenience the site provides, you should take care to act with equal parts caution.

Most PayPal scams come in the form of messages impersonating the company. This allows scammers to ask for information that could allow them to hack into your PayPal account directly or possibly even infiltrate your bank account.

A message from PayPal will always address you by your first and last name, never by "Dear User," or "Dear [your email address]." If an email looks suspicious, it’s best to report it to PayPal then delete it. 

But many also attempt smaller-scale scams perpetrated by beating businesses out on details like payment or shipping options. Of course, this works both ways, with some scammers posing as sellers, collecting payments but never actually delivering the promised goods.

Generally, there are two main ways scammers try to intrude into PayPal customers’ lives: by sending fake emails and fake payments.

PayPal Scam Emails

PayPal scam emails are arguably the most widespread scam to look out for when dealing with the company. By and large, these are emails supposedly sent from the company, and they will almost always ask for your personal information in one way or another. (The email may ask you directly for details or include a link you’re meant to click on.)

If the email does include a link, it’s important to never click on it. Enter “www.paypal.com” into a different web browser instead.

Example of PayPal scam email
There are three key red flags in this email, pointing it to a scam. 1) It isn't coming from a genuine PayPal.com email address. 2) The email was sent to the Spam folder. 3) There's a typo/grammar issue in the email.

It’s also imperative to never give out identifying details—including your address, birth date, and especially your password or any specific account numbers—in response to an email. The company itself says it will never ask for your bank account, credit card information, or password via email.

PayPal Scams Involving Payment

Another class of common PayPal scams includes those dealing with shipping and payment information.

These mainly target businesses that offer PayPal payments as an option. Scammers posing as customers will try to get their goods for free—or at least try to get some money back—through a variety of tricks, including alleging they’ve already paid for their product or that they’ve overpaid.

Scams that impersonate other brands may also bring PayPal into the mix. For example, a Venmo phishing email scam tricks victims into believe there is a large sum of money waiting to be sent to them via PayPal.

Most Common Types of PayPal Scams

A few types of PayPal email scams are particularly prevalent—and, unfortunately, continue to be quite effective.

When using PayPal, whether as a buyer, a seller, or for a money transfer between friends, make sure to stay wary of these types of scams.

The “Too Good to Be True” Email

Several different PayPal scam emails fall into this category, including emails informing you that you:

  • Have become the beneficiary of an inheritance.
  • Have won the lottery or some other type of contest.
  • Are owed some payment.

It may sound great—and oh so tempting—to believe that you’ve suddenly come across a bundle of money that you never knew previously existed. But try to push past the temptation to see the truth: These things hardly, if ever, actually happen.

Most of the time, these emails will ask you to make a small payment (via PayPal) to facilitate the money transfer. Sometimes they’ll also include forms to fill out with personal data.

Aside from the apparent “too good to be true” signs, red flags to look out for include lousy grammar and questionable return email addresses.

The “Account Error”

Another popular form of a PayPal email scam includes an urgent message sent to you, supposedly from the company, to alert you to some issue with your PayPal account.

Many times, these include links to send you to a site to “fix the problem.” They can send you to a site that looks very much like PayPal, but be wary of the domain name—it will be slightly different.

Example of PayPal phishing email.
There are several red flags to look for in a PayPal phishing email, including the sender's address and spelling/grammatical errors.

However, the best route is to never click on the links at all. They can easily download spy software or other viral information onto your device, or the sites they lead you to could be feeding your information directly to the scammers. Instead, access your PayPal account by typing in the PayPal URL directly into your web browser.

Other times, the scammers will ask for sensitive information, including your account password or bank account number. It is imperative to never give out such information over email. Remember: PayPal will never ask you for your bank account, credit card number, or password via email.

The Overpayment or Shipping Address Swap

Primarily impacting those who sell items and use PayPal to collect payments, these types of scams supposedly come from—or on behalf of—customers.

The simplest version of this involves a customer claiming that they’ve overpaid for a product and asking for the difference back. (The easiest solution to this is to cancel the transaction entirely and start fresh, rather than refund anything.)

Example of PayPal overpayment scam
Scam buyers will request refunds via wire transfer and apps like MoneyGram. (Source: The Smart-Lazy-Hustler)

Sometimes, scammers will send an email, making it appear as they’ve already paid you in an attempt to coerce you into rushing out a delivery.

And sometimes, the scam involves a delivery address bait-and-switch. The scammer will provide the wrong delivery information, then file a complaint after several failed delivery attempts (and finally “correct” the shipping address) to get the product for free, with a complaint filed against you, as the seller, to boot.

How to Beat PayPal Scams

To ensure you’re not scammed by someone impersonating PayPal, it’s important to remember the following:

  • Legitimate emails from PayPal will come from an @paypal.com email address. Scammers may try to trick you by having their name as “PayPal Customer Service,” but their email address will not be from an @paypal.com account.
  • Emails from PayPal will address you as your first name and last name, or the business name associated with your account—they will never address you as “Customer” or something non-personal like that.
  • PayPal will never ask for information like your password or bank account information via email.
  • PayPal will never send you any attachments via email or request that you download or install any software.

Remember, if there’s anything fishy about an email you received from PayPal, don’t click any of the links. The safest thing to do is access your PayPal account by typing in “paypal.com” directly into your web browser. This way, you know you’re visiting the real PayPal site and not a fake link sent to you by a scammer.

Protection for PayPal Customers

Thankfully, PayPal has several ways to deal with these types of scams or any other fraudulent or suspicious activity you may notice on your PayPal account.

Report Scams to PayPal

If you’ve been the recipient of—or think you’ve received—a PayPal email scam, the best thing to do is report the email directly to PayPal. Forward the email to [email protected], where the company will evaluate the message. Then, once it’s been forwarded, delete it from your inbox.

PayPal Resolution Center

PayPal also offers a Resolution Center where you can make individual claims or disputes about specific payment activities, including money you sent and money you received. Simply sign in to your PayPal account to access the Resolution Center.

The Resolution Center handles most fraud-based inquiries, but if you don’t find what you’re looking for there, you can send a secure message to PayPal while logged into your account.

PayPal Security Notifications

PayPal will send you an email notification if your account is changed—including a password change—or the company detects what it perceives to be unusual account activity, such as signing in from a unique location or device. If you receive one of these notifications but don’t remember taking the action in question, it could be a sign that your account has been hacked.

Sign in as quickly as you can and change your password as well as your security questions. You may also want to double-check your account information, including your email address, address, and phone number, to ensure they haven’t changed. Finally, you should report the issue to PayPal’s Resolution Center.

Scams Impacting PayPal

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Red Flags of Fake Venmo Email Scams Promising A Lot of Money

Red Flags of Fake Venmo Email Scams Promising A Lot of Money

Venmo users are noticing suspicious emails hitting their inboxes with claims of a large sum of money waiting to be transferred by a PayPal user.

Red Flags of Fake PayPal Emails About Your eBay Transactions
21 August 2021 |

Red Flags of Fake PayPal Emails About Your eBay Transactions

Fake PayPal emails regarding your eBay transactions are sent by scammers to fake payments and steal your information.

Package Reroute Scam: Always Buy Your Own Shipping Labels
3 June 2021 |

Package Reroute Scam: Always Buy Your Own Shipping Labels

Although buyers may seem like they're being helpful, an offer to organize shipping for you is often an attempt to scam you.

How to Avoid PayPal Shipping Label Scams: Top Tips
25 May 2021 |

How to Avoid PayPal Shipping Label Scams: Top Tips

PayPal is a convenient way to pay for online purchases and has a reputation for safety and security. But scammers still find a way to use PayPal to help them steal products.

PayPal Shipping Scams: Tips to Protect Your Money and Items
24 May 2021 |

PayPal Shipping Scams: Tips to Protect Your Money and Items

Scammers take advantage of PayPal's buyer protection program to scam sellers out of their money and items for sale.

Free PayPal Money Scams: Don't Believe the Hype, It's a Scam
20 May 2021 |

Free PayPal Money Scams: Don't Believe the Hype, It's a Scam

Multiple free money scams that easily fall under the “too good to be true” scams that target loyal PayPal users with promises of free PayPal money.

PayPal Charity Scams: Scammers Use Fake Charities to Rob You
19 May 2021 |

PayPal Charity Scams: Scammers Use Fake Charities to Rob You

These scams target those who want give back, preying on your generous nature to scam you out of your money.

Protect Yourself From Craigslist PayPal Overpayment Scams

Protect Yourself From Craigslist PayPal Overpayment Scams

Getting more money than you've asked for may seem great, but it could actually be part of a scam to steal your money.

PayPal Overpayment Scam: Tips to Prevent Being Scammed
9 April 2021 |

PayPal Overpayment Scam: Tips to Prevent Being Scammed

In this scam, people sending payment via PayPal send more than you've requested, but you end up being the one to lose money.

Craigslist PayPal Scam: Signs of This Scam To Watch Out For

Craigslist PayPal Scam: Signs of This Scam To Watch Out For

If a buyer on Craigslist insists on only using PayPal to transfer money to you, be careful not to click on any links that they send you or you receive via email from PayPal.

Guides To Protect Against Banking & Finance Scams

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PayPal Protection for Buyers and Sellers: Keeping You Safe

PayPal Protection for Buyers and Sellers: Keeping You Safe

The great thing about using PayPal when buying or selling things is that you're (for the most part) protected from fraud and scammers.

How to Beat PayPal Scams and Keep Your Money Safe and Secure

How to Beat PayPal Scams and Keep Your Money Safe and Secure

Whether you use PayPal for personal use or business transactions, scammers are out to get you. It's what you know and how you act that will keep your money safe.

Guides in Other Categories...
What to Do If You've Been Scammed (How to Report Scams)
18 October 2021 |

What to Do If You've Been Scammed (How to Report Scams)

Getting scammed isn't fun, and there's often little you can do to recoup your losses, but there are steps you should take to protect yourself.

5 Reasons Why You Need to Check Your Credit Score Regularly
8 October 2021 |

5 Reasons Why You Need to Check Your Credit Score Regularly

You may not pay much attention to your credit score until you need to apply for credit, but we have important reasons why your credit shouldn't be out of sight, out of mind.

How to Get Money Back on Cash App if Scammed
23 August 2021 |

How to Get Money Back on Cash App if Scammed

If you've been scammed on Cash App, there are a few things you can try to get your money back, but you need to act fast.

News About Banking & Finance Scams

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News in Other Categories...
N.J. Man Pleads Guilty to SIM Swapping Conspiracy Stealing Over $500k From Victims
5 October 2021 |

N.J. Man Pleads Guilty to SIM Swapping Conspiracy Stealing Over $500k From Victims

This case shows just why you need to be aware of SIM swapping and how to protect your cell phone number from criminals like this.

Student Loan Scammers Arrested After Stealing $6.1 Million
22 September 2021 |

Student Loan Scammers Arrested After Stealing $6.1 Million

After a 3-year long scam, Angela Mirabella and six others have been indicted on several charges, including grand theft.

FBI Warns Fake COVID Vaccine Cards Could Lead to Prison Time
14 September 2021 |

FBI Warns Fake COVID Vaccine Cards Could Lead to Prison Time

Taking a chance on a fake COVID-19 vaccination card seems like an easy way to get around requirements, but think again before you land yourself in prison.

Beware of this New Scam Involving A Fake Call from CBP
10 September 2021 |

Beware of this New Scam Involving A Fake Call from CBP

Sometimes it just safer not to pick up calls from unknown phone numbers.

Nike Teams Up with U.S. Customs to Stop Counterfeiters
23 August 2021 |

Nike Teams Up with U.S. Customs to Stop Counterfeiters

Nike is taking a stand against counterfeiters and stopping fake products before they hit U.S. soil.