Digital payments providers help make online shopping safer and more convenient. Yet when money’s involved, scammers and other cybercriminals are quick to move in. PayPal scams are common since it’s one of the most prominent brands in the industry.
To give you deeper insight into the impact scams like this cause, Americans alone lost over $4.2 billion to cybercrime and fraud in 2020. By 2025, experts see the cost of cybercrime hitting whopping heights of over $10.5 trillion annually.
Many PayPal scams take advantage of psychological factors to encourage people to make payments. Here are 7 of the most common PayPal scams you need to avoid;
1. Fake PayPal Emails
There are many kinds of fake emails, but some specifically target PayPal users. Getting their hands on readily available emails lists, scammers blast out a generic email claiming to be from PayPal. While the contents of the email may vary, the aim is to get you to click on a button or link within.
Once you click the link, you’ll be redirected to a fake website asking for PayPal credential confirmation or log in. As soon as you enter that information, the scammer uses it to access your PayPal account.
Avoiding the Fake PayPal Email Scams
Always be cautious when clicking on any links you get in your emails. When in doubt, hover your mouse over the link to see where it leads before clicking on it. Genuine emails from PayPal will always come from the paypal.com domain.
2. Advance Fee Scams
The advance-fee scam is a twist on the age-old Nigerian Prince scam that tries to persuade you someone wants to give you lots of money or valuable package delivery. Once you’ve taken the bait, the scammer will then try to reel you in.
You’ll quickly find another notification from your benefactor saying that a fee needs to be paid for the transfer or delivery to happen. Some scammers disappear as soon as you’ve paid that fee, while others may keep asking for more – until you realize the truth.
Avoiding PayPal Advance Fee Scams
Money or stuff that drops from the skies is rarely legit. Bill Gates isn’t likely to send you $10 million via PayPal out of the goodness of his heart. If something sounds too good to be true, it likely is.
3. Shipping Address Scams
PayPal has systems in place to protect buyers and sellers, but it isn’t perfect. Loopholes exist that scammers tend to exploit, and you could fall prey if you aren’t careful. The PayPal shipping address scam is one form of this.
Once a scammer has made a purchase, you’ll send the item to the address provided. That address can be fake, and the scammer will notify the shipping company to use an alternative address instead.
Once the shipment arrives, the scammer contacts PayPal, claiming non-delivery. PayPal’s system only covers the shipping address provided in the transaction details. Since it will legitimately show a non-delivery to that address, PayPal will refund the buyer’s money, leaving you without the item or payment.
Avoiding PayPal Shipping Address Scams
This scam is a little trickier since you have little control over the shipping company. Attempting to verify provided addresses before making a shipment is one possible workaround. You may also consider finding a shipping company that won’t allow alternative addresses once orders are confirmed.
4. Hacked PayPal Account Scams
Hackers sometimes gain control of PayPal accounts and use them to send money or make purchases. If a hacked PayPal account purchases from you, the service provider will reverse payments once informed.
Unfortunately for you, shipments might already have been made by then, leaving you without the money or items. If you aren’t part of the PayPal Seller Protection program, then you’ll simply be out of luck.
Avoiding Hacked PayPal Account Scams
PayPal has a system to protect sellers in this scenario, but you need to comply with terms and conditions to qualify. Among these conditions are a US address for your PayPal account, shipping of tangible goods, compliance with documentation requests, and more.
5. Bait and Switch Scams
Many buyers and sellers use PayPal because of the many systems to help prevent or reduce fraud. In some cases, potential buyers might start with PayPal as the medium but try to entice you to switch to alternative solutions like Western Union or others.
The usual bait is that PayPal fees or something is high, and you’ll both save more in the transaction if using another platform for payments. Some may offer you higher prices for items if you’re willing to accept payments on other platforms.
Doing so moves you out of the PayPal security ecosystem into unknown grounds. Not all payments providers offer comprehensive buyer and seller protection.
Avoiding PayPal Bait and Switch Scams
Unless you’re very familiar with the alternative platform provided, stick with PayPal. They’ve been around for long enough to know what they’re doing and have great protection policies.
6. Fake Charity Scams
While fake charity scams aren’t specific to PayPal, many try to solicit donation payments through this platform. It’s a trusted brand and helps them mask the same that’s going on. They’re relying on tales of hardship and woe to get you to part with your money.
In reality, those funds could be going for any purpose, from enriching individuals to funding terrorist groups. Scammers often make use of significant recent incidents, such as a flood, hurricane, earthquake, or worse.
Avoiding PayPal Fake Charity Scams
Wanting to help the less fortunate is admirable, but exercise caution about how you do so. Do some fact-checking on the organization soliciting funds to see if they’re a legitimate charity.
7. The Once-in-a-Lifetime Opportunity Scam
Again not unique to PayPal, these scammers will contact you with an offer of a fantastic opportunity. It might be an investment, partnership, or something else, but they’ll use PayPal as the platform of choice to give you confidence through a known brand name.
Once you’ve sent them the funds, they’ll likely string you along and sometimes even make small “gain” payments back on your investment. These small payments often entice you to send them even more significant amounts later on.
At some point, the scam comes tumbling down, and you’ll simply lose everything.
Avoiding Fake Investment Opportunities on PayPal
Before making any investment, check the company operating to see if it’s a legitimate business. Avoid investing in areas of unfamiliarity and don’t believe them if the return on investment rate seems simply too good to be true.
Always Ensure Proper PayPal Account Protection
PayPal may be well-established, but scammers are savvy and work the system. They know that the weak link in the system isn’t the platform but often the people using them. They often prey on human emotions like greed or fear.
While this can be personal and hard to avoid, what you can do is to make sure your PayPal account is properly secured. Some things you can do include;
- Ensuring compliance with PayPal Seller Protection guidelines
- Installing PayPal’s mobile app for anytime notification on transactions
- Quickly report any unauthorized activities
- Use a unique and robust password
- Secure your devices with adequate protection
- Learn to identify fake or spoofed emails
The most important thing to realize is that you need to be in the right frame of mind to stay safe online. Know the guidelines you need to follow to make secure transactions, and as far as possible, don’t deviate from them.
Stay safe online and not just while making transactions online. That means protecting your device security with Internet security tools and protecting your privacy and data using a Virtual Private Network (VPN).
If something sounds too good to be true, it like is. This fact is something I need to stress over and again. While it’s tempting to think that you might be that special one and there’s a way out of your problems that drops from the sky, you might end up digging yourself a bigger hole.
Money doesn’t come easily, but there are many legitimate ways of making a buck online. Don’t fall prey to criminals that are trying to take your hard-earned money for themselves.
If you think you’ve been scammed, work quickly to get help directly from PayPal. I know it can be frustrating to deal with them sometimes, but they’re in the best position to assist you with scams on their platform.