PayPal is the biggest online payment service in the world, which means it can be found on most websites and most users have an account. But everything popular becomes a target, and as PayPal have grown they have attracted the attention of scammers, who have used the service’s mass popularity against it.
What follows is a list of PayPal scams currently affecting users of this online payment service, scams that all PayPal users need to be aware of.
PayPal Overpayment Scams
These scams are common with deals that take place outside of eBay and they can be used to target everyone from small-time e-commerce stores to big dealers and, in most cases, people selling cars, bikes or other high-ticket items.
You receive a payment for an item that you have sold through PayPal and the amount is more than you asked for. The buyer contacts you and tells you that they made a mistake, requesting that you send the overpayment amount via a wire transfer.
This con can also take on other forms. They may give you more money as a “bonus”, only to tell you that they couldn’t afford it and ask for it back. They may request that you send an overpayment to a shipper, importer, or friend, using all kinds of excuses to justify it.
How is it Scam?
A good scam is one that doesn’t raise any suspicions because the victim fails to see how they are being scammed. That is what happens here. After all, you have the money for the sale and they are covering the cost of a wire transfer for you to send the overpayment back, so what have you got to lose?
Well, while you have the money now, you likely won’t have it for long. These scams are used by fraudsters who open accounts with stolen credit cards and debit cards. They use those cards to pay for the items knowing that by the time the card is reported stolen and the money is returned, they will have their item and the additional money that you wired to them.
It’s a win-win for them, but not for you, because when the card is reported stolen all transactions will be reversed, PayPal will take the money that you received and you will be down the money, the item, and the additional money that you wired to them.
How to Avoid
- Do not wire anyone any money. If they pay you extra through PayPal, you can simply send it back to their PayPal account (or, better yet, cancel the order and report them).
- Do not send the item to them until you have heard from PayPal (after reporting them).
- Do not send money to shipping companies requested by them.
PayPal Phishing Scams
PayPal is an easy target for scammers because so many people have PayPal accounts. They know that if they send a phishing email to 1,000 random people, they’ll hit at least 500 PayPal users.
You receive an email from PayPal saying that there has been an issue with your account and asking that you login via a link in order to verify something. This can take on many forms. It may warn you that an invoice has gone unpaid, that an amount of money is about to leave your account, or even that you have been the victim of fraud.
Which is ironic, because these emails are often sent by fraudsters as part of a scam known as “phishing”.
How is it a Scam?
The link in these emails points to fake PayPal login pages. They look just like the real thing, but they are not. When you input your username and password and press “login”, that information is then stored on a database setup by the scammers. It means that they then have your login details and, as a result, everything that you have in your PayPal account.
They can then use your account to send money to their own account and they can also use it to glean information about your finances, such as your bank account details, credit card numbers, and personal details.
How to Avoid it
PayPal do occasionally send emails warning customers about certain things, but legitimate emails look completely different to phishing emails. The scammers use the same logos, but they tend to use very poor English and poor formatting and they make a lot of mistakes. It only takes a keen eye to spot these at first glance, but there are other ways to spot them.
Look at the sender’s address. Their name may be PayPal Support, but did it actually come from a PayPal.com email? Also, look at the link. If you scroll over it you should be able to see where it is pointing. If not, right click, click “Copy Link Address” and then paste it into a document. They tend to uses shortened URLs, but may also be using a long one. In any case, if it’s not PayPal.com, it’s not legit.
Of course, the easiest way is just to login to your PayPal account without clicking any links. When you do, always make sure the URL bar says “https://PayPal.com” and that the padlock sign is always there.
PayPal Shipping Scams
Shipping scams are popular with PayPal scammers because it’s one of those things that sounds legitimate on first glance, and will raise little suspicion in many inexperienced PayPal uses.
PayPal shipping scams can take on many forms, but the two most common are to use legitimate shipping companies, but ask you to use their account with that company; or to use fake shipping companies, in which case they may have direct access to any money and details you send.
How is it a Scam?
When dealing with a fake shipping company the fraudster can access your money and maybe even your details. Where genuine shipping companies are concerned it can be difficult to ascertain whether there is a scam taking place or not.
Typically, what a scammer will do is ask that you use their shopping account, either because it is more reliable, because they get benefits or because they have a good relationship. Whatever the story they give you, it’s not true. They do this because it is easy for them to log into that account and reroute the shipment, which means that you never have their real address, but they still receive the item.
They may also lodge a complaint to say that they ever received the item, even though they did.
How to Avoid
Ignore any requests to use their shipping company or account. It doesn’t matter how persistent they are, because it will simply not end well for you. If you are concerned about the order and suspect that they may be trying to scam you, you should cancel it. Even if the order does go through and you can prove that you sent them the item, they may still be using a stolen card, which could result in you having your funds taken away from you.
Other PayPal Scams
PayPal is the world’s biggest online payment service, so it’s only natural that it will be the most popular with scammers. It’s not necessarily PayPal’s fault and is entirely down to it’s size and popularity.
- Prizes: You are sent a message saying that you have won a prize and you just need to pay a handling fee to collect it. This is one of the oldest scams in the book and it plays on a person’s desperation and greed. There is no prize and those handling fee requests will just keep coming even when you pay them.
- Charity Scams: Every time there is a natural disaster or an attack, there are fake charity pages set up. It even happens in the name of parents who have sick children. Make sure the page comes from an official source (such as the actual parents of that child) before donating anything.
- Investment Scams: You may be sent messages saying that there is a guaranteed investment opportunity and you just need to send X amount of money through PayPal. These are scams—no investment is guaranteed and if there was such an opportunity, you wouldn’t hear about it from some random unsolicited email.
- Reshipping: This scam involves receiving goods and then reshipping them nationwide or worldwide. They may offer to pay you, but ultimately what you’re doing is illegal. You are likely handling stolen goods and then distributing these to the scammers. It makes you a target of law enforcement and is technically illegal, even if you are oblivious as to how those goods were sent or paid for.