PayPal is one of the top digital currency exchanges in the world. Most everyone has heard of PayPal and has used it at least once to receive or make a payment. Many online vendors allow payments through PayPal. Their notoriety also makes PayPal and its customers targets for scams and fraud.
What is Paypal
PayPal was founded in 1998 by Max Levchin, Peter Thiel, Luke Nosek, Ken Howery Yu Pan and Russel Simmons, and was originally called Confinity. After its IPO in 2002, it became a wholly owned subsidiary of eBay, the community marketplace. By 2018, PayPal ranked 222nd on the Fortune 500 of the largest United States corporations by revenue. All sales and purchases made through eBay go through PayPal. In 2005, PayPal acquired VeriSign to add to its e-commerce platform and provide security and confidence to its products and services. As of today, more than 286 million people have PayPal accounts. That is a huge customer list providing plenty of targets for scammers.
PayPal Scams and How Do They Work
PayPal, although very popular, is not the most secure payment service around. PayPal is well known, so that makes it easier to trick unsuspecting customers using phishing emails, malicious websites, fake social media ads, and spoofed links to bilk money or personal information out of them. Sometimes they want your username and password; other times, they simply get you to pay for things you never wanted. Some of the most common scams on PayPal are:
1. Advance Fee Paypal Scams
There are many variations of this one, some linked to “Nigerian Prince” or 419 scams, but either way the result is the same. You receive an email claiming you won an absurd amount of money or a huge prize. The only catch is that you have to pay the shipping, taxes, or fees, and then your money will be delivered to you without haste. Of course, it’s a lie. In the process, the fraudsters may also collect personal information about you (name, address, phone number, driver’s license number, social security number, etc.) to use for identity theft later. Once you pay the fee, you never hear back from them again, and you were duped. They use PayPal to extort the funds from you because recouping lost funds is more difficult through this service.
What to Do and How to Respond to Advance fee fraud
First, if you receive an email that looks like it comes from PayPal, investigate the real “sender’s email address.” Unless it comes from paypal.com, it’s not legitimate. If they ask you to click a link, fill out any forms, or pay a fee, it’s a scam. Do not give out your information to anyone who requests it. Remember, if it sounds too good to be true, it probably is. No one gives you millions for nothing.
2. Problem With or Verify Your Account Paypal Fraud
Again, there are different versions of this one, but the objective remains the same. You receive an email that looks like it came from PayPal (with all the logos and fonts just right), but it says there is a problem with your account, and you need to click the link to verify it or fix it immediately. You click the link and are taken to a fake website that mirrors PayPal, you enter your credentials or other private information, and now the hackers have it! Sometimes they promise to waive fees or other freebies to get you to click, but don’t fall for it; it’s a scam.
What to Do and How to Avoid PayPal Account Scams
It’s important to note that if you see a link on the page of an email, that text can easily be faked and actually take you to an entirely other location. So, never trust the text you see. Instead, hold your mouse over the link to see where it really goes. PayPal will never ask you to provide your login credentials except on the login page. Sometimes to panic users, hackers will use language like “your account is about to be suspended” in hopes that you will click without thinking. Instead log into your account from a new browser window and check on things that way.
Some other ways to avoid this PayPal account scam are:
NEVER click links in emails, even if they appear to be legitimate. Go to your web browser and type in paypal.com and then log in to your account.
Forward all spam emails that appear to be from PayPal to firstname.lastname@example.org so they can investigate and shut down the cybercriminals.
Additionally, forward the same emails to the FTC at email@example.com.
Never provide personal details or logins to anyone you don’t know.
3. “You’ve Been Paid” PayPal Payment Scams
Another popular type of fraud is when scammers send you an email that looks like it came from PayPal, saying you have been paid. You then ship out the goods and find that you were never paid for the item. Because PayPal does send out emails when you use the eBay system, they hope this fake will trick you into thinking you’re all set, so you ship without verifying. Now you are out the money and lost the item in the process. These types of data breaches occur more than you think
What to Do with PayPal Payment Fraud
Never ship out any goods before logging onto your PayPal account (from a clean browser window) and making sure you were paid.
Print the shipping label directly from eBay, so you don’t end up sending your valuables to a fraudster. Do not ship to any alternate address that they request through email. This is a big red flag that it is a scam.
Watch out for these types of emails. Look for improper grammar and always verify the sender’s email address to ensure it really came from PayPal.
4. Overpayment Scams Using PayPal
The overpayment scam is a whopper. PayPal outlines a typical scenario. You receive a spoofed email that says “that you’ve been paid $500 for a camera you listed at $300! The sender asks you to ship the camera in addition to the extra $200 you were “paid” by mistake. In this example, the scammer wants your camera AND your money, but hasn’t actually paid you at all.” Now you lost your camera and an extra $200. Don’t fall for this cruel trick.
What to do if You Get Scammed on PayPal?
Never trust the information that comes through in an email. Always log into your eBay or PayPal account and verify payments and fees before you ship anything.
Be on the lookout for spoofed emails and examine the sender’s email address to find out where it really came from.
Report these and other scams to PayPal so they can investigate and catch these criminals.
How to Detect a Paypal Phishing Email Scam
Along with the scams above, be on the watch for fake charities and investment opportunities that seem low risk and high profit. There are also many other scams through PayPal. On their website, PayPal outlines what an email from them will do and will not do:
Paypal Email Scam Will:
Ask you for sensitive information like your password, bank account, or credit card.
Contain any attachments or ask you to download or install any software.”
Paypal Email Scam Won’t:
Come from paypal.com. Scammers can easily fake the “friendly name,” but it’s more difficult to fake the full name. A sender like “PayPal Service (zxk1942R3@gmail.com)” is not a message from PayPal. But sophisticated scammers can sometimes fake the full name, so look for other clues.
Address you by your first and last names or your business name.