PayPal Scams Overview
We’ll be taking a slightly different approach in this article by highlighting common ways scammers use PayPal to deceive their victims. This approach will involve covering a couple of different methods that often target individuals running e-commerce websites or those selling products and services online. Some of these scams can be used to target victims making online purchases.
Scam 1: Fake PayPal Payment Confirmations
One popular scam involves scammers sending an email that appears to be from PayPal that states you’ve received a payment. These emails often look convincing, using official logos, language, and techniques like email spoofing to mimic a legitimate PayPal email.
The email usually claims you’ve received a payment through PayPal, but for some reason, the funds aren’t showing up in your account due to a supposed "issue". Because the email is spoofed to look authentic, if your email service isn’t equipped to handle this type of fraudulent attack, you may believe it’s a genuine notification from PayPal.
Once you receive the email, the scammer will start pressuring you, claiming they’ve already paid and haven’t received the product or service. In some cases, they’ll even go a step further by sending fake screenshots from a phony bank account to make it seem like payment was made. Scammers may also increase the pressure by threatening to report you to PayPal or even law enforcement if you don’t deliver the goods.
Scam 1: Key Takeaways
The entire scenario is staged: The email is fake, no payment was ever made, and any "proof of payment" is fabricated.
The explanation of a PayPal “issue” is false: It’s simply an excuse to make you believe the payment problem is temporary. It’s also a convenient lie that attempts to explain why you cannot actually verify the payment directly through your PayPal account.
Threats of legal action are baseless: The scammer has no intention of reporting you to the police or PayPal because, in reality, you’ve done nothing wrong.
Scam 2: PayPal Business Account Upgrade
This is a newer variation of the original “Fake Payment Confirmation" PayPal scam above, but with a few twists. This variation has gained traction throughout the last few years.
In this version, the scammer sends an email that appears to be from PayPal, stating that you’ve received a payment from a buyer. However, it claims the payment is being temporarily held because your PayPal account is not registered as a "Business Account." The email instructs you to upgrade your account to receive the funds.
Here’s the catch: to upgrade your PayPal account, the email says you need to pay the user a specified amount, often labeled as an "upgrade fee." Conveniently, the email assures you that this fee will be refunded once the account upgrade is completed and the payment is released. You’ll also recognize that the email will mention that the payment has to be made via the “Friends and Family” option instead of the “Goods and Services” option. This is because PayPal does NOT provide buyer/seller protection when sending payments via the “Friends and Family” option. In other words, PayPal will NOT reimburse you, even if you can provide proof that you were scammed.
Scam 2: Key Takeaways
Spoofed email: Similar to the first PayPal scam, the email will look authentic, complete with logos and official-sounding language.
Fake payment & hold claims: Again, like the first PayPal scam, no payment was actually received and the “temporary hold” claim is just a lie to explain why you cannot verify it directly within your PayPal account.
Upgrade fee: The scam relies on convincing you to send money to the scammer under the pretense that it’s an “upgrade fee” necessary to release your payment. The email promises a refund of this fee once the upgrade is processed, which of course, never happens.
Friends and Family: Remember, PayPal’s “Friends and Family” payment option is reserved exactly for that, friends and family. PayPal does not offer their standard buyer/seller protection when payments are made or received through this option.
What to Do if You're Targeted
When it comes to emails claiming to be from PayPal, it’s important to be cautious. Assume every PayPal-related email is fraudulent until you can verify its legitimacy directly through your PayPal account. Here's how to stay safe:
Verify payments through PayPal: If you receive an email stating that you've been paid, log in to your PayPal account to confirm. If there’s no record of the payment in your account, delete the email immediately and stop communicating with anyone claiming they’ve sent money.
Ignore upgrade requests: PayPal will never ask you to upgrade your account through email or request payment for an upgrade. Any email suggesting that you need to pay a fee to upgrade your account should be deleted. This is a scam - there’s no such thing as paying to upgrade your PayPal account.
Understand the “Friends and Family” payment option: This feature is meant for personal transactions between people you know and trust. PayPal will NOT reverse payments sent using the "Friends and Family" option, even if you later discover you’ve been scammed.
By following these simple steps, you can avoid falling victim to PayPal scams. Always verify payment claims directly within your account and remember that legitimate PayPal communications will never ask you to pay for account upgrades.
