How scammers use PayPal (and how to protect yourself agains them)

If you’re using PayPal, you might be concerned about scams going around, and for good reasons.

Statista reported that PayPal was one of the leading payment methods for fraud in 2021. About 61% of online merchants said that PayPal is the most fraudulent online payment system.

That’s why it’s critical to set up proper security measures to protect your PayPal accounts against scammers.

We looked into official PayPal sources to understand how it protects users against scams. We also read the latest news on PayPal scams because it’s important to know their latest tactics. We gathered the best tips for keeping your PayPal account safe from scammers.

We share the most common mistake people make that you should avoid. After reading this article, you’ll avoid doing all the wrong things when using your PayPal account that could compromise your information and make you vulnerable to scams.

How do scammers target PayPal users?

Did you know there were 429 million PayPal users in the first quarter of 2022? No wonder scammers target PayPal users for their fraudulent acts.

Here are the latest PayPal scams you need to be aware of:

The “Problem with your account” scam

Hackers may send you an email or a PayPal unauthorized activity text stating a problem with your account. A sample email may have a header: “Your PayPal account has been temporarily restricted.” 

The scammers, using the name of PayPal, may also inform you that they’ve found suspicious activity on your transaction. As a result, you won’t be able to send payments and withdraw funds.

If you receive this email, it’s normal for you to want to fix your account immediately. However, the fraudsters will include a link redirecting you to a fake PayPal website.

They’ll ask you to log in to the fake website so they can collect your PayPal username and password.

The promotional offer scam

Who doesn’t want cash rebates or incentives?

Scammers take advantage of the fact that almost anyone would be willing to provide their login details for promotional offers.

Here’s how the promotional offer scam works:

  • Fraudsters send you an email stating that you’re one of the lucky winners of a cash incentive or rebate.
  • At the end of the email, you’ll see a link or button prompting you to sign in to the fake PayPal website.
  • They’ll be able to access your account once they get your PayPal username and password.

PayPal users often fall for this scam because the company offers legitimate cash back on selected purchases.

The “you have money waiting” scam

Scammers may also send an official-looking email that says, “Money is waiting for you.” Under the said header, you may see hundreds of dollars that should be added to your PayPal account.

It’s believable because fraudsters will show you an edited picture of PayPal’s invoice or transaction details.

They’ll ask you to click the “Claim it” button and visit the spoof PayPal website so you can enter your username and password.

Unfortunately, this is a fake PayPal payment pending on your account.

In reality, no one will send you hundreds of dollars for free. It’s one of those too good to be true scenarios, so you must be careful if you receive this message.

The “advance payment” scam

Have you received an email requesting a certain amount in exchange for thousands of dollars?

That email is a perfect sample of the fake PayPal advance payment scam.

The scammer may ask for $500, but you’ll receive thousands of dollars after a few days. They’ll claim that you must secure the transaction with a certain person for PayPal to process the fund transfer.

There’s even a conversion rate to make the email look legitimate.

Some emails also mention that you must pay in Bitcoin for lesser charges. The message is all made up because you don’t need to pay before earning, especially since it’s not an investment.

The hacked account scam

This scam mainly targets sellers. Here’s how it works:

  • Someone uses a hacked PayPal account to pay for your products.
  • As a seller, you ship the goods immediately to give customers a good impression.
  • However, once PayPal discovers the hacked account, they’ll confiscate the funds from your balance.

As a result, you’re left without any income from that fraudulent sale while the hacker obtained the item.

It’s alarming that stolen PayPal accounts are now priced at $197. Although the accounts almost tripled in price, scammers still want to buy them to earn thousands of dollars each day.

The overpayment scam

This scam also deceives business owners. Here’s how fraudsters execute the overpayment scam:

  • You’ll receive a message from a buyer saying that they sent you more than the agreed price.
  • The buyer will claim that it’s a mistake and ask for a refund for the difference.
  • The person may even threaten you with a complaint, so you’ll be obliged to wire the money outside PayPal.
  • Once the scammers receive the transfer, they dispute the PayPal transaction and claim that their accounts were hacked.
  • PayPal will approve their refund, and you can no longer recover the money you transferred.

Since it’s an unauthorized payment, PayPal won’t recognize the amount you sent to the scammers.

Phishing email

You may also receive PayPal spam emails that look like the official ones. They contain the logo, official-looking template, and script to deceive you.

However, you may notice spelling or grammatical errors in their emails. The fraudsters may even demand that you act immediately to verify your account or provide financial information.

Usually, scammers include attachments, but once you open or download these files, your device will be compromised. They may also send links to fraudulent websites to get your sensitive information. 

Did you know that messages with script viruses or malware may infect your gadgets even if you only open them, not download the attached files?

But don’t worry since we’ll provide tips on how to protect yourself from PayPal scams.

Invalid shipping address

Bogus buyers may give an invalid shipping address to steal your products. Since the address is fake, the shipping company can’t deliver the parcel to that location.

Due to this problem, the buyers will provide a legitimate address. Once they receive the parcel, they’ll report to PayPal and claim that they didn’t receive the item after several demands from you.

Since the new delivery address doesn’t match the original one, PayPal will usually grant the refund. As a result, you’ll be left without any income from that sale.

You shouldn’t ship a product the second time when the customer provides an invalid delivery address.

“Friendly name” or display name spoofing

In this scam, hackers will use a friendly-looking display name that looks related to PayPal. You might receive an email from “PayPal Service,” but the full email address includes a random string of alphanumeric characters.

When you get messages from similar email addresses, they’re from fraudsters wishing to hack your device and collect sensitive data.

Fake charities and investment opportunities

Unfortunately, even charities are not spared from scammers. They use natural disasters to trick people into donating to fake charities.

For example, scammers post their PayPal emails to ask for donations during a natural disaster or terror attack. But in reality, the said charitable organization doesn’t exist.

Moreover, “high-profit-no-risk” investments are scams because all investments require some level of risk. So if people claim they can triple your money, it’s usually a scam.

You already know the recent PayPal scams, but there’s still one question that’s always asked by PayPal users.

“Can you get scammed by giving someone your PayPal email?” 

The answer is yes because they can send you phishing emails. Fortunately, they won’t be able to hack your account, provided that they don’t know your password. Besides, you need to give your PayPal email address to receive payments. 

In the latter part of this article, we’ll share privacy tips regarding your email address and how to avoid the scams mentioned above.

What does a real PayPal email look like?

Scammers victimize thousands of people because only some users know what an actual PayPal email looks like.

Below are the indications of a legitimate email from the company:

  • Comes from and not other domains
  • Contains your full name, as shown in your account
  • Updated PayPal design or logo
  • Without spelling or grammatical errors
  • Without downloadable attachments
  • Never ask you for financial information

Take note of these criteria and compare the emails you receive from suspicious senders.

What should you do if you become a victim of PayPal scams?

The first thing you must do is change your PayPal password and security questions to stop scammers from accessing your account.


If you become a victim of phishing, here’s what you must do:

  • Forward the email to [email protected].
  • Delete the email after reporting to PayPal.
  • If you clicked any link or downloaded an attachment, monitor your PayPal account for suspicious activity. Make sure to change your password.

Unauthorized account activity

If you notice a fraudulent transaction, follow these steps:

  • Sign in to your PayPal account.
  • Go to the Resolution Center, then click “Report a Problem.”
  • Choose the suspicious transaction, then tap “Continue.”
  • Click “I want to report unauthorized activity.”
  • Follow the prompts after clicking “Continue.”

Fraudulent buyer or seller

The company offers PayPal Purchase Protection and Seller Protection to protect both buyers and merchants. Here’s how you can report the incident:

  • Follow the first three steps in the “Unauthorized activity” section.
  • Choose “I didn’t receive an item I purchased…” or “I want to report unauthorized activity.”
  • Tap “Continue,” then follow the prompts on the website.

You may also call Customer Service at 1-888-221-1161 for other concerns.

Will PayPal refund your money when you get scammed?

Yes, PayPal’s Refund Policy allows you to get your money back, but you must comply with the requirements.

For example, if you paid for an item that never arrived, you can file a dispute within 180 days. You can cancel the transaction if it’s still Pending. If you haven’t received the money for more than 30 days, PayPal will automatically refund the amount to your PayPal balance.

If you’re a seller, your transactions can also be covered by PayPal’s Seller Protection. It has several requirements, such as proof of delivery and signature confirmation. You can receive full reimbursement plus the shipping costs.

Take note that you need to file a dispute within 180 days or 60 days in cases of unauthorized charges.

The chargeback process will also allow you to ask for a refund. It involves asking your credit or debit card issuer to reverse a transaction. But you should contact your bank or credit card company for this option since they have varying requirements.

So you have three options—the 180-day refund policy, purchase protection, and chargeback.

What are the risks of using PayPal?

Even PayPal is not risk-free, especially since it uses your personally identifiable information (PII) and financial data.

Here are some of the risks of using PayPal when paying or selling:

  • Scammers may hack your account, access your credit card, and make fraudulent purchases.
  • You’re more vulnerable to phishing scams because hackers know that once they get your username and password, they can buy anything using your credit or debit card.
  • Sometimes, PayPal will not grant your refund request, resulting in a loss of money.

How to protect yourself from PayPal scams?

Any PayPal user, including you, can be scammed with PayPal. Still, you can protect yourself from the scams we discussed.

  1. When you receive an email from PayPal, check the full email address, not just the display name. We found out that people’s most common mistake is failing to review the actual email address, so they respond to scammers’ messages.
  2. View suspicious emails in plain text to protect your devices against script viruses, which hackers may embed in their emails.
  3. Give your PayPal email address only to persons you know or trust. When you make it accessible to the public, you become an easy target for phishers.
  4. Don’t transfer money or give personal information in exchange for thousands of dollars. It’s the common template of money waiting and advance payment scams.
  5. Make sure you only donate to legitimate organizations.
  6. Invest only in legal companies, not in “high-profit-no-risk” business scams.

Can you avoid PayPal scams?

Despite the growing number of fraudulent activities related to PayPal, you can still avoid becoming victims of these scams. 

The best habit you can have is checking the full email address when you receive official-looking emails from PayPal. By being selective about who you interact with, you can become a difficult target for scammers.

It’s also great that you’re familiar with the recent scams, like promotional offers, advance payment, hacked accounts, overpayment, phishing emails, and invalid shipping addresses. This way, you know how to avoid them.

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