7 common PayPal scams and how to avoid them

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PayPal is a convenient way to send and receive money with just a few taps or clicks. Although convenience is a big selling point, scammers are hard at work trying to take advantage of it. You are probably familiar with the PayPal scam email asking you to provide your PayPal information to unlock your account. There are ways to tell it’s not real, but as online scammers become more sophisticated, it becomes increasingly difficult to spot the danger.

This guide tells you about the latest PayPal scams, as well as the steps to take to report PayPal scams.

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What are common PayPal scams?

According to PayPal, people tend to be less cautious online than they would be if they were walking down the street. Although PayPal has strong security protocols in place, it’s up to you to protect your account and your money. The following scams are the most common encountered by the digital payment processor.

1. Advance Charge Fraud

You may receive a request for a small amount of money before the person can send you a larger amount.

For example, you may be asked to send money to cover taxes or documents needed to release the funds. In exchange, the fraudster will send you money — which never arrives.

What to do about it: Never engage or send someone money in the hope of receiving a big cash bonus.

2. Prize winnings

One of the most common PayPal email scams involves a foreign lottery. Good news – you just won millions but you have to pay someone a processing fee to receive the funds. Some people may think that the small amount of money they have to send is well worth the big payout, which is perhaps why this is one of the most common PayPal email scams.

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What to do about it: Lotteries generally do not require you to pay to receive your winnings. If you receive such a request, it is probably a PayPal scam email.

3. PayPal Overpayment Scam

Another PayPal scam to watch out for is getting paid more than expected for goods or services you sold. The person may then ask you to return the difference instead of refunding it via PayPal.

The problem is that the initial payment may have been made with a stolen credit card. If you transfer funds directly, the fraudster keeps the money and you’ll be caught when the person whose stolen card was used reports the fraudulent transaction, making PayPal overpayment scams costly.

What to do about it: If someone is overpaying you, your best bet is to refuse or cancel the order. According to PayPal, overpayments are almost always fraudulent. Also, never transfer money to someone you don’t know, especially if it’s a refund for an overpayment.

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4. PayPal Fraudulent Email

As mentioned earlier, scammers are getting more and more sophisticated about the fake emails they send.

These emails may look like genuine emails from PayPal, suggesting that funds are on hold until the items you are selling are shipped. This can trick you into sending the goods, thinking that PayPal is holding your money for you – when in reality, you’ve just given away your product for free and there’s no money waiting for you.

What to do about it: If you’re concerned about PayPal holding your funds, contact them directly to confirm. Do not click on any of the links contained in the fraudulent e-mail and do not use any of the contact information provided.

5. Fake charity scam

Times are tough these days, with natural disasters, war and poverty forcing everyone to help where they can. Scammers take advantage of these moments of crisis to line their pockets. If you receive an email asking you to donate PayPal funds to a good cause, it may be one of the latest PayPal email scams.

What to do about it: Before deciding to donate, research the charity. The following websites are a good starting point:

  • Charity Navigator
  • charity watch

If you’re not sure but want to help, consider donating to a charity you know instead.

6. PayPal Shipping Scam

Many PayPal scam email requests you may receive involve shipping fraud. You may be asked to use the carrier of your choice or they may get a discount from a specific shipping company. In most cases you will also be asked to send the shipping costs by bank transfer to what you believe to be the shipping company.

The problem lies in who has control. The scammer could redirect the package or say it was never received. You may find it hard to resist.

What to do about it: Avoid involving a third-party shipping company and stick with your own so you can more accurately track the shipment. Adding shipping insurance for a small fee could help in case the item is not received – you could be refunded the cost of the items.

7. Employment Scam

You can find attractive job opportunities online and even go through what looks like a successful interview process. But then suspicious behavior may begin.

You may be hired and asked to buy materials or items for them and the company will reimburse you. The problem is that the company wasn’t hiring or maybe didn’t even exist, leaving you with an invoice for goods you don’t have.

What to do about it: Avoid any work plan that requires you to pay for goods or invest money upfront.

How do I know if a message from PayPal is real?

A little common sense and instinct are needed to avoid falling into a trap. If the offer is too good to be true, it probably isn’t real. Also, PayPal will never ask you for your personal information. Other clues include an email address that is not from @PayPal.com or the URL looks garbled. Also, PayPal always includes your full name as it appears in your account, so avoid generalized messages such as “hello” or “Dear Sir”.

As with most things, it’s always best to check. If you are unsure, contact PayPal directly about the issue by sending them a message through the PayPal app or website or by calling Customer Service at 1-888-221-1161 between 6:00 AM and 6:00 PM PST.

How to report a PayPal scam

If you receive fraudulent PayPal emails, reporting them to PayPal can help. Do not click on emails, open or download attachments, or call any of the phone numbers listed. Instead, forward the email to [email protected] and delete it from your inbox. You can forward fraudulent text messages to the same address.

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Remember that if an offer is too good to be true, it probably isn’t real. Be careful who you engage with. Avoid sending money to someone you don’t know or providing personal account details.

Editorial note: This content is not provided by any entity covered by this article. Any opinions, analyses, criticisms, evaluations, or recommendations expressed in this article are those of the author alone and have not been reviewed, endorsed, or otherwise endorsed by any entity named in this article.

About the Author

Cynthia Paez Bowman is a personal finance writer with a degree in international business and journalism from American University. In addition to writing about personal finance, she writes about real estate, interior design, and architecture. His work has been featured in MSN, Brex, Freshome, MyMove, Emirates Open Skies magazine and more.

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