PayPal is an integral part of digital transactions worldwide, providing a convenient and secure platform for sending and receiving payments. However, its widespread use also attracts scammers, resulting in frequent and diverse scams. According to recent data, an alarming figure of 35,000 accounts were hijacked in January 2023 alone. This guide aims to help you understand these scams, recognize their signs, and arm you with tools to protect yourself.
How often do PayPal scams happen?
PayPal scams are increasingly common, with an estimated 35,000 accounts compromised in January 2023. These scams range from phishing attempts to unauthorized transactions, and they continue to evolve, keeping pace with technological advancements and security measures.
How a VPN helps protect against PayPal scams
A VPN, or Virtual Private Network, encrypts your internet connection, protecting your data from being intercepted by hackers. This encryption can deter scammers from stealing your PayPal login credentials or accessing your financial information.
Scam in Paypal Examples
- Fake PayPal “payment confirmation” emails
- Fake invoices from real PayPal email addresses
- Emails claiming your PayPal account is locked
- Fake PayPal “Fraud alert” text messages
- PayPal “accidental” overpayment scams
- “Wrong person” transfers on PayPal
- Invalid shipping address scams
- Requests for “Friends and family” payments
- You’re sent “free” money
- Fake charity donations through PayPal
- PayPal Bitcoin scams
- Fraudulent password reset emails
- PayPal technical support scams
- Malicious fake PayPal attachments
- Fake PayPal websites
- “Payment Pending” scams
- “Account Suspension” scams
- “Account Limitation” scams
- Fake job offers requesting payment through PayPal
- Investment scams requesting payment through PayPal
By understanding these scams, recognizing their signs, and implementing safeguards, you can better protect yourself and your financial information from falling into the hands of scammers. Stay vigilant, stay informed, and stay safe.
1. Fake PayPal “Payment Confirmation” Emails
What is it and why it works: This scam involves the scammer sending you an email posing as PayPal, with a message confirming a payment you never made. It works because the unexpected notification of a transaction creates panic, leading people to act impulsively by clicking on the links provided in the email, which often leads to a phishing website.
How a VPN helps and how to avoid it: A VPN won’t stop the scam email from reaching you, but it helps protect you when browsing online by encrypting your data, which adds a layer of security if you accidentally click on a phishing link. The key to avoiding this scam is awareness. Always double-check the sender’s email address, look for any spelling or grammar errors, and never click on links or download attachments from an unexpected email. Instead, log into your PayPal account directly from your browser to check for any recent transactions.
2. Fake Invoices from Real PayPal Email Addresses
What is it and why it works: Scammers often send fake invoices that appear to be from PayPal, requesting payment for a product or service you didn’t purchase. These emails may even come from real PayPal email addresses, making them appear legitimate. This works because the professionalism and seeming authenticity of the invoice can deceive users into paying for nonexistent goods or services.
How a VPN helps and how to avoid it: A VPN secures your online activity and adds an extra layer of security, reducing the chance of your information being intercepted if you accidentally fall for such a scam. You can avoid this scam by never paying invoices you weren’t expecting without thoroughly verifying them first. Contact the supposed sender directly through official channels to confirm whether the invoice is real.
3. Emails Claiming Your PayPal Account is Locked
What is it and why it works: In this scam, fraudsters send emails posing as PayPal, claiming that your account has been locked due to suspicious activity. The email often contains a link to a fake PayPal website asking you to enter your login details to unlock your account. The scare tactic of a locked account prompts quick action from worried users, often bypassing rational thought and leading to credential theft.
How a VPN helps and how to avoid it: Using a VPN provides a secure online connection and can help shield your data from scammers. However, the best defense against this scam is vigilance. Always remember that PayPal will never ask for your login details via email. If you receive such an email, do not click on any links or provide any information. Instead, access your account directly from the official PayPal site to check its status.
4. Fake PayPal “Fraud Alert” Text Messages
What is it and why it works: This scam involves text messages that appear to be from PayPal, alerting you of fraudulent activity on your account and providing a link to verify your information. The urgent tone and fear of fraud often lead people to act without thinking. However, the link directs you to a phishing website where your details can be stolen.
How a VPN helps and how to avoid it: A VPN secures your internet connection, making it harder for scammers to intercept your data. However, to avoid this scam, do not click on any links sent via text message. PayPal will never ask you to verify your personal or financial information via text. If you suspect fraudulent activity, log into your account through the official PayPal app or website to check.
5. PayPal “Accidental” Overpayment Scams
What is it and why it works: This scam usually happens when you’re selling a product or service. The buyer sends payment through PayPal but “accidentally” overpays. They then ask you to refund the excess amount, usually through another payment method. The trick here is that their initial PayPal payment is often fraudulent and will eventually be reversed, leaving you out of pocket.
How a VPN helps and how to avoid it: A VPN helps protect your online activities from potential data breaches, but the best way to avoid this scam is to be wary of overpayments. Never agree to refund an overpayment via a different payment method. If a buyer overpays, cancel the original payment and ask them to resend the correct amount.
6. “Wrong Person” Transfers on PayPal
What is it and why it works: In this scam, a person sends you money and then contacts you claiming they’ve made a mistake. They’ll ask you to send the money back. After you return the money, they’ll file a dispute with PayPal claiming they never received the original item they paid for. This works because the scammer is taking advantage of PayPal’s buyer protection policies.
How a VPN helps and how to avoid it: While a VPN can protect your online activities, the best way to avoid this scam is to not send money back when you receive an unexpected payment. Instead, refund the transaction. This way, the money will go back to the sender and they won’t be able to claim that they never received an item.
7. Invalid Shipping Address Scams
What is it and why it works: In this scam, a buyer will pay for an item and provide a shipping address. After the item is sent, they’ll claim they never received it and provide a different shipping address. PayPal may then withdraw the payment from your account due to their buyer protection policies. The scam works because it exploits the seller’s willingness to rectify a perceived mistake.
How a VPN helps and how to avoid it: While a VPN can protect your personal information online, it can’t prevent this scam. Always ship to the address provided in the original transaction details. If a buyer provides a different address, ask them to update their PayPal information and cancel the original payment so they can resend it with the correct address.
8. Requests for “Friends and Family” Payments
What is it and why it works: Some scammers may ask you to send money via PayPal’s “Friends and Family” option, which doesn’t have the same protections as “Goods and Services.” The scammer might promise goods or services in return, but once they receive the payment, they disappear. This scam works because it exploits the trust between friends and family, and takes advantage of a less-protected payment method.
How a VPN helps and how to avoid it: While a VPN can secure your online activities, the primary defense against this scam is to never send money via the “Friends and Family” option unless you trust the person completely. Always use “Goods and Services” when buying items, even if the other party insists otherwise.
9. You’re Sent “Free” Money
What is it and why it works: In this scam, you receive an unexpected payment in your PayPal account. The sender then contacts you, claiming they made a mistake and asking for the money back. Once you return the payment, the scammer files a dispute with PayPal, stating they never authorized the original payment. The scam works because it plays on people’s honesty and integrity.
How a VPN helps and how to avoid it: A VPN secures your internet connection, helping protect your personal data. However, if you receive unexpected money, do not send it back using a new transaction. Instead, refund the original payment. This way, the sender can’t claim they didn’t authorize the payment.
10. Fake Charity Donations through PayPal
What is it and why it works: Scammers create fake charities and ask for donations through PayPal. The scam works because it exploits people’s empathy and willingness to help others in need. The fake charities often mimic real ones, making it hard for donors to differentiate between the two.
How a VPN helps and how to avoid it: While a VPN can protect your personal and financial information, the best way to avoid this scam is by doing your research before donating. Always verify the legitimacy of a charity through official government websites. Don’t donate through links sent via email or text messages; instead, go directly to the charity’s official website.
11. PayPal Bitcoin Scams
What is it and why it works: This scam involves selling Bitcoin through PayPal. After completing the transaction, the buyer can file a dispute with PayPal claiming they never received the Bitcoin. Since cryptocurrency transactions are typically irreversible and hard to trace, and PayPal often sides with the buyer in disputes, the seller is left without both their Bitcoin and the sold funds.
How a VPN helps and how to avoid it: While a VPN can protect your personal information, avoiding this scam comes down to being careful with cryptocurrency transactions on PayPal. Be wary of buyers who have no transaction history or have only recently created their accounts. Ideally, avoid using PayPal for cryptocurrency transactions altogether due to the inherent risks.
12. Fraudulent Password Reset Emails
What is it and why it works: This scam involves scammers sending an email pretending to be from PayPal, suggesting that you need to reset your password for security reasons. The email contains a link that takes you to a fake but convincing PayPal login page designed to steal your credentials. The scam works because it exploits fears about account security.
How a VPN helps and how to avoid it: A VPN can help by encrypting your online browsing, but the best way to avoid this scam is not to click on links in unsolicited emails. If you receive an email stating that you need to change your password, go directly to the PayPal website by typing the URL into your browser and make the changes from there.
13. PayPal Technical Support Scams
What is it and why it works: This scam involves scammers pretending to be PayPal technical support. They may contact you via phone or email, claiming that there’s an issue with your account that needs immediate attention. The scam works because people tend to trust authority figures and want to resolve issues quickly.
How a VPN helps and how to avoid it: A VPN can protect your personal information while online, but avoiding this scam requires skepticism and verification. PayPal will never ask for your password or banking information. If you’re contacted by someone claiming to be from PayPal, hang up or ignore the email and contact PayPal directly through their official contact methods to verify the situation.
14. Malicious Fake PayPal Attachments
What is it and why it works: Scammers send emails pretending to be from PayPal with an attachment, claiming it’s an invoice, receipt, or other document. The attachment is actually malware designed to infect your computer and steal your personal information. The scam works because it looks like legitimate communication from PayPal, tricking people into opening the attachment.
How a VPN helps and how to avoid it: A VPN secures your online browsing but can’t protect you from a malware infection. The best way to avoid this scam is never to open an attachment from an unexpected or suspicious email. If you’re expecting a document from PayPal, access it through the official website or app, not through an email attachment.
15. Fake PayPal Websites
What is it and why it works: This scam involves scammers creating a fake PayPal website to steal your login credentials. They lure you to this site through phishing emails or text messages. The scam works because the fake websites can look convincingly like PayPal’s official site.
How a VPN helps and how to avoid it: A VPN protects your data by encrypting your internet connection. However, the key to avoiding this scam is to always check the URL before logging in. PayPal’s official site will always begin with “https://www.paypal.com“. Be wary of any variations of this.
16. “Payment Pending” Scams
What is it and why it works: In this scam, a buyer will make a payment on PayPal, but it will show as “pending.” They’ll request the item be sent before the payment clears. After the item is shipped, the scammer cancels the payment. This works because it capitalizes on the seller’s eagerness to make a sale and trust in the buyer.
How a VPN helps and how to avoid it: A VPN protects your personal information online, but it cannot prevent this scam. The best way to avoid this is by never shipping an item until the payment clears and is in your PayPal account. If a buyer insists on shipping before the payment clears, consider it a red flag.
17. “Account Suspension” Scams
What is it and why it works: Scammers send an email posing as PayPal, claiming that your account has been suspended due to suspicious activity. The email contains a link that directs you to a fake PayPal website where they hope you will enter your login information. This scam works because it exploits your fear of losing access to your account.
How a VPN helps and how to avoid it: While a VPN provides a secure internet connection and protects your data, the best way to avoid this scam is by never clicking on links in such emails. If you receive an email about account suspension, go directly to the official PayPal website by typing it into your browser and check your account status there.
18. “Account Limitation” Scams
What is it and why it works: This scam involves an email from a scammer posing as PayPal, stating that your account access has been limited due to policy violations, and you need to click a link to restore full access. The link will lead you to a fake PayPal website designed to steal your login details. This scam works because it exploits the panic induced by the thought of losing account access.
How a VPN helps and how to avoid it: While a VPN protects your internet connection by encrypting your data, avoiding this scam comes down to awareness. Never click on links in such emails. Instead, access your PayPal account by typing the URL directly into your browser to verify any account changes.
19. Fake Job Offers Requesting Payment Through PayPal
What is it and why it works: Scammers post fake job offers and ask for application or training fees to be paid via PayPal. After you send the money, they disappear. This scam works because it preys on job seekers who are eager and sometimes desperate to secure employment.
How a VPN helps and how to avoid it: While a VPN can help secure your data online, the best way to avoid this scam is by being cautious of job offers that ask for money upfront. Legitimate employers typically don’t charge application or training fees. Always research a company thoroughly before accepting a job offer.
20. Investment Scams Requesting Payment Through PayPal
What is it and why it works: Scammers convince you to invest in a lucrative scheme and ask you to send funds via PayPal. Once the money is sent, the scammer disappears. This scam works because it takes advantage of people’s desire for easy and quick financial gain.
How a VPN helps and how to avoid it: A VPN can secure your online activities, but the best way to avoid this scam is by being skeptical of any investment that sounds too good to be true. Always do your research and consider seeking advice from a trusted financial advisor before making an investment. If the investment opportunity asks for money via PayPal, consider it a red flag.
How PayPal protects you
PayPal offers several security measures to protect its users. These include data encryption, 24/7 fraud detection monitoring, and secure payment systems. It also provides a Purchase Protection program, which covers you in case you receive an item that doesn’t match the seller’s description or if you don’t receive the item at all.
How you can protect yourself
While PayPal provides robust security measures, users also have a role in safeguarding their accounts. This involves using strong, unique passwords, activating two-factor authentication, being wary of unsolicited emails or messages, and only using trusted networks for transactions.
Signs of a PayPal phishing email
PayPal phishing emails are fraudulent messages designed to trick you into revealing your login credentials or personal information. Signs to watch for include poor grammar and spelling, generic greetings, urgent requests for action, and email addresses that don’t match PayPal’s official domain.
Signs of a PayPal scam
PayPal scams vary in their approach, but there are common signs. These include requests for payments through unconventional methods, overpayments followed by requests for refunds, messages claiming there’s a problem with your account, or unsolicited offers.
What to do if you’re a victim of a PayPal scam
If you fall victim to a scam, report it to PayPal immediately. Change your account password and security questions. Monitor your account and bank statements for unusual activity, and consider taking additional security measures, such as activating two-factor authentication.
Frequently Asked Questions
What are some common PayPal scams?
There are many types of PayPal scams, including phishing emails, fraudulent sales, overpayment scams, and more. This guide provides a detailed list of 20 common scams.
How can I recognize a fake PayPal email?
Fake PayPal emails often have grammatical errors, generic greetings, urgent requests for action, and sender addresses that don’t match PayPal’s official domain.
Can I get my money back if I’m scammed on PayPal?
PayPal’s Purchase Protection program can help you get your money back if you’ve been scammed. However, this depends on the circumstances and type of transaction.
Is PayPal safe to use?
Yes, PayPal is generally safe to use. It has robust security measures in place. However, users must also take precautions to protect their accounts.
How does PayPal protect my information?
PayPal protects your information using data encryption, secure payment systems, and 24/7 fraud detection monitoring.
What should I do if I receive a suspicious email claiming to be from PayPal?
If you receive a suspicious email, don’t click on any links or download any attachments. Report it to PayPal for investigation.
How does a VPN protect me from PayPal scams?
A VPN protects your internet connection by encrypting your data, making it harder for scammers to intercept your login credentials or financial information.
What should I do if my PayPal account gets hacked?
If your account gets hacked, contact PayPal immediately, change your password and security questions, and monitor your account for any suspicious activity.
Can I prevent PayPal scams?
While you can’t completely prevent PayPal scams, you can reduce your risk by taking precautions such as using a strong, unique password, enabling two-factor authentication, and being vigilant about phishing attempts.
What is PayPal’s policy on scams?
PayPal has a strict policy against scams. It actively monitors for fraudulent activity and works to protect users through its security measures and Purchase Protection program.