Have you ever received an email that looked like it was from PayPal asking you to verify your account details? Get a text message requesting you to click a link to confirm a payment? Or come across a too-good-to-be-true offer involving free money from PayPal?
If so, you may have been targeted by a PayPal scam. As one of the largest online payment platforms with over 400 million active accounts, PayPal is a prime target for scammers seeking to steal money and personal information. In 2021 alone, PayPal handled 5.3 billion payment transactions with a total value over $1.2 trillion . Wherever huge sums of money flow, criminals follow.
In this comprehensive guide, we’ll walk you through the most common PayPal scams circulating today, tips to avoid falling victim, and what to do if you find yourself caught in the trap. Let’s break down the need-to-know details to keep your money and identity secure!
The Most Common PayPal Scams to Watch Out For
While PayPal itself is legitimate and generally safe, clever scammers have figured out numerous ways to game the system. Here are 12 of the most prevalent PayPal scams and frauds to beware of:
1. Phishing Scams
Phishing scams are the most popular way for scammers to infiltrate PayPal accounts. Through very convincing looking emails, texts or calls, phishing attempts trick you into clicking malicious links or revealing your PayPal login credentials and other sensitive personal information.
Scammers launch extremely sophisticated schemes, with forged sender addresses and logos. Emails often pose as security alerts, notifications of suspicious activity on your account, warnings your account was limited, or requests to verify your account details to avoid being locked out.
Once clicked, the phishing links take you to websites nearly identical to the real PayPal site, down to using “paypal” in the URL. But it’s a trap to harvest your username, password, credit card number or other valuable data when you enter it.
According to PayPal, the company blocks over 10 million phishing attempts per month on average . But many still slip through security filters. A 2022 survey found a shocking 1 in 3 Americans were fooled by fake PayPal websites in the prior year . Stay vigilant against phishing.
2. Invoice Scams
With invoice scams, victims receive official looking (but fake) invoices via email demanding payment for an online purchase or service fees. The items listed are things you never actually bought.
The fraudulent invoices often threaten immediate account suspension or legal action if you don‘t pay up. Of course, any payments just go straight into the scammer‘s pocket. This tactic pressures victims into hasty payments out of fear, before realizing the invoices are bogus.
3. Overpayment Scams
In a popular overpayment scheme, a scammer buys your goods, say a $500 smartphone listed for sale online, and "accidentally" sends $1000 instead. They then nicely ask if you can wire back the $500 overpayment.
You oblige, only to later find out the original $1000 payment was fraudulent. So you‘re out that $500 you wired back, while the scammer pockets the cash. PayPal is a favorite platform for overpayment scams due to its ubiquitous use for online purchases.
4. Donation Scams
These fraudsters prey on your generosity. They solicit donations via PayPal for fake charities, bogus causes like disaster relief, fake fundraisers, or imaginary personal emergencies. Of course, any money sent doesn‘t reach a good cause, just a scammer’s wallet.
A 2022 FTC report found a shocking 25% jump in donation fraud reports, with victims losing $63 million . Scammers exploit our desire to give back. Watch out for tear-jerking stories with PayPal links attached.
5. Account Takeovers
Here fraudsters gain access to your actual PayPal account profile by buying stolen credentials on the dark web, using malware to grab passwords from your devices, or social engineering customer service agents.
Once inside your account, they can steal your money, link their own credit cards, change account details, redirect deliveries for items you’ve purchased, and use your identity to conduct their own scams. Immediately report unauthorized access.
6. Fake Goods Schemes
Scammers post hot ticket items, like the latest gaming console or iPhone model, for sale at an amazing price. They just take your payment and ship…nothing. Or send a worthless item like a brick instead of the advertised product.
By the time you realize it’s a scam, they already cashed out your money from the associated PayPal account. PayPal will ban these scammer accounts once reported, but your money is usually long gone.
7. Triangulation Schemes
With triangulation fraud, a scammer buys an item from Seller A using a stolen or fake payment method. The scammer has the item shipped to a second person, Seller B. After it arrives, they “buy” the item from Seller B for real using their own PayPal funds or a bank transfer.
Now they can keep the item and their money too, while leaving Seller A without a dime. This scam takes advantage of PayPal‘s Seller Protection. Both sellers can get caught unaware, so be leery of unusual shipping requests.
8. Friends & Family Payment Insistence
Standard PayPal payments for goods and services allow you to open disputes and attain certain buyer and seller protections if issues arise. But PayPal’s Friends and Family payments have no buyer recourse in case of fraud or non-delivery.
Knowing this, some scammers insist on only taking Friends and Family payments. Without standard payment protections, you have zero options if that “friend” rips you off. Never pay strangers via Friends and Family.
9. Fake Shipping Company Schemes
Here scammers create completely bogus shipping companies or hijack dormant company business accounts. They provide you with (fake) tracking info showing your item supposedly shipped. By the time you realize nothing is arriving, they already withdrew your money from the shell company’s linked PayPal or bank account.
Always independently look up and verify shipping companies before paying for items to avoid this sneaky fraud. PayPal also warns about this on their site .
10. Money Flipping Scams
A scammer contacts you with a too-good-to-be-true investment offer to double your money in days by exploiting “loopholes” in PayPal, crypto investing, or online auctions. They say PayPal can’t track certain types of money movements or payments.
All you need to do is send your investment to their account via PayPal, then watch the (fake) profits roll in. This is just a ploy to swipe your money with no intention of paying you back. There are no shortcuts to easy money.
11. PayPal Portal Cons
This trick convinces victims to visit a “special PayPal portal” in order to receive payment for selling an item online or collect a monetary gift. Scammers send links to convincingly replicated PayPal login and payment collection portals designed to steal any credit card or bank account details entered.
Legitimate PayPal would never require you to visit an alternative site. But this scam banks on people‘s trust in the PayPal brand and desire to collect payments.
12. Survey and Prize Scams
Through social media, emails, or ads, scammers invite you to take part in an exciting survey, contest or sweepstakes with huge prizes! All you need to do is provide your PayPal address to collect your winnings. Of course, they pocket any money sent for "fees and taxes" to release funds, with victims getting nothing.
While PayPal does offer legitimate customer surveys, unsolicited prize offers are always too good to be true. Don’t get duped into willingly sending money to scammers.
Statistical Data on PayPal Scams
Let‘s look at some revealing statistics that demonstrate the sheer scale of PayPal scams and account takeovers:
- 5.3 billion – Total number of PayPal transactions in 2021, representing huge volume for scammers to target 
- $1.2 trillion – Total dollar amount transferred through PayPal globally in 2021 
- 483 million – Number of active registered PayPal user accounts worldwide as of Q3 2022 
- #10 – PayPal‘s rank among the most impersonated brands used for phishing attacks in 2022 
- 1 in 3 – Percentage of Americans who report being tricked by fake PayPal or Venmo websites 
- 25% – Increase in reported donation fraud in 2022 with $63 million lost 
- 50% – Portion of millennials and Gen Z who say they lost money to a mobile payment (including PayPal) scam 
- 10 million+ – Number of phishing attempts on PayPal accounts blocked every month 
These startling figures demonstrate how much energy cybercriminals put into stealing your info and money through PayPal cons. No one is totally immune from mistakes or moments of weakness. But forewarned is forearmed against these underhanded schemes.
Expert Tips to Avoid PayPal Scams
While PayPal scams are rising, with smart precautions you can spot fraud and safeguard your account. Follow this expert guidance adapted from PayPal’s security tips , the FTC , and the AARP  to stay scam-free:
- Avoid links in emails/texts: Go directly to PayPal via your browser or the app. Don‘t click links or call numbers in suspicious messages.
- Check senders: Emails should come from PayPal‘s official customer service addresses like [email protected], [email protected] or [email protected] to report phishing.
- Verify requests: Don‘t send money for an “emergency”, shipping fees, taxes, or prizes unless you initiated the transaction. Ask yourself, "Did I really buy or sign up for this?"
- Just say no to Friends & Family: Decline requests to pay with Friends & Family for selling or buying items. You lose dispute options for fraud.
- Review account activity: Log in frequently to check for unauthorized charges and reverse suspicious transactions early.
- Use credit, not debit: Link a credit card to provide stronger fraud protections. Debit cards drain cash fast when scammers attack.
- Deploy two-factor authentication: Add an extra step to login via text code or authenticator app. This stymies most account takeovers.
- Use unique passwords: Have different complex passwords across all accounts. Password reuse allows scammers wider access.
- Beware overpayments: Only refund excess payments using the original method. If pressured to return supposed "accidental" funds another way, it’s likely fraud.
- Research before donating: Vet unfamiliar charities before sending money to ensure they are legitimate.
- When in doubt, call PayPal: Don‘t hesitate to contact customer service if things seem weird or you suspect unauthorized access.
PayPal provides 24/7 phone support and account protections you can use if targeted by a scam. But con artists are cunning social engineers who know how to manipulate psychology and emotions. Always stay calm, use common sense, and double check before sending money.
What To Do If You’re Scammed on PayPal
If you realize you mistakenly sent money to a scammer – don’t panic. Here are steps to take right away if victimized:
- Contact PayPal immediately: Call or email customer service about unauthorized payments. Provide any details you have about the scam or transaction.
- Report to the FTC: File a complaint with the Federal Trade Commission about fraud for legal tracking.
- Notify your bank: Your bank may be able to stop connected payments or give provisional credits during disputes.
- Change passwords: Update your PayPal password immediately and any other accounts using similar passwords. Enable two-factor authentication if you haven‘t already.
- Remove unauthorized access: Check linked accounts in PayPal and remove anything unfamiliar that may indicate account takeover.
- Review recent activity: Scan your transaction history closely for other signs of misuse. Start disputes for unauthorized charges.
- Place a hold if needed: Temporarily limit account activity to prevent further damages during investigation.
- Monitor your credit: Request credit reports in case of potential identity theft and report inaccuracies related to the scam.
- Consult an attorney if needed: For large losses, you may need legal guidance about further steps and options for potential civil action.
The faster you report unauthorized transactions, the better your chances of reversing damages. PayPal‘s Purchase Protection program also covers certain eligible chargebacks and claims on consumer accounts . But there are never guarantees. Staying vigilant is the best protection.
How Does PayPal Protect Against Fraud?
PayPal has extensive real-time fraud monitoring in place and states less than 0.1% of total payments experience issues with loss . Their system uses AI and machine learning to analyze hundreds of signals and patterns in transactions to detect and shut down scammers.
PayPal also offers tools to help customers avoid fraud, including:
- Secure login: Encrypted sign-in using multi-factor authentication options.
- Notification center: Alerts about payment requests, shipping status and other account activity.
- Fraud analysis: Risk assessment on transactions with enhanced verification steps like ID confirmation or denied payments for high-risk cases.
- 24/7 monitoring: Around the clock human and technical oversight to catch scams.
- Purchase Protection: Coverage for eligible chargebacks up to $20,000 in verified unauthorized payments .
- Account limits: Restrictions on personal accounts for sending/receiving money to control fraud.
- Security tips: Guidance and educational resources on the PayPal site about current scams.
- 101 – PayPal’s dedicated phone support for immediate help with account security concerns.
No payment system can prevent all fraud. But PayPal provides extensive account security and monitoring tools. Make sure you also take an active role by implementing smart protection strategies.
Recap: Top PayPal Scam Protection Tips
Let’s recap the key tips to avoid PayPal scams and keep your hard-earned money safe:
🔑 Use unique complex passwords and enable two-factor authentication
🔑 Look for email/text sender inconsistencies
🔑 Avoid clicking links and call numbers in messages
🔑 Always log in directly via the real PayPal website or app
🔑 Never provide your password or financial details due to an unsolicited message
🔑 Review account activity frequently for unauthorized transactions
🔑 Only send money for legitimate purchases you personally made
🔑 Be extra cautious when dealing with strangers
🔑 Never pay with Friends & Family for buying or selling items
🔑 Contact PayPal immediately about suspicious activities
Stay vigilant for common scam warning signs, follow security best practices, and you can use PayPal with confidence rather than fear. Outsmarting scammers and protecting your money is the ultimate payment victory!