Common PayPal scams and how to avoid them

PayPal is a super popular service for anyone sending money online, shopping with ecommerce sellers, or even looking for digital account services. However, like any financial service provider, there are ways PayPal customers can get hit by scams and fraud.

This guide covers a full run through of how to avoid scams on PayPal, what to look out for, and some common PayPal scams in operation today.

📑 Table of Contents
Common PayPal scams PayPal email fraud PayPal fake charity fraud PayPal gift card fraud PayPal Facebook fraud PayPal advance fee fraud PayPal phishing and fake hyperlinks How to avoid scams on PayPal: summary Send money internationally with a secure Wise transfer How does PayPal deal with scams?

Common PayPal scams

Financial fraud and scams can happen on any platform, sadly. Fraudsters and criminals are innovative and look for new ways to trick vulnerable people out of their hard earned money.

That means it’s important to be on your guard whenever you buy things online, send payments or even click through on links sent by email or social media.

Frauds do evolve over time — but there are some tactics which are more common than others. Knowing about common PayPal scams is an important way to steer clear. Let’s dive into some of the most common ways fraudsters target victims through PayPal.

PayPal email fraud

One of the key ways scammers try to trick people on PayPal is through PayPal email scams¹. These can take several different forms but usually you’ll receive an email purporting to be sent by PayPal which has actually been sent by a criminal.

Posing as a legitimate company email, you may be asked to click a link or enter your account details — inadvertently giving fraudsters access to your PayPal account and funds.

Emails may look like they originate from a PayPal account — so called ‘friendly name’ scams. Hover over the email address to see who really sent it. Common PayPal email scams include:

• Being told your account is about to be suspended
• Being told you’ve got money waiting to be delivered to your PayPal account
• Being told you’ve been paid too much when selling an item online

How to avoid PayPal email fraud

Check who the real sender is before you react to any PayPal email Don’t click on links embedded in emails — log into your PayPal account in your browser instead Never give your PayPal password to anyone Report scams and fraud attempts to: spoof@paypal.com

PayPal fake charity fraud

Because it’s so easy to make payments with PayPal, it’s a common way to make charity donations. However, that also means that fraudsters use this as a way of trying to trick people into sending money to bogus charities.

This is especially common when there’s a specific issue in the headlines, such as a natural disaster. Many people will want to donate to the cause, and so fraudsters may publicize their fake charity to catch a few people out.

Always look carefully at any charity you’re supporting — and double check the credentials and the organization’s history. Doing simple checks like making sure the organization has a website and a physical address, or that it’s registered, can be all it takes to make sure your money goes to good causes rather than criminals.

How to avoid PayPal fake charity fraud

Verify any charity you’re considering giving to is legitimate Look for charities which have a website, physical address and registration details Don’t click through on links sent asking for charity donations — enter the organization name into your browser directly to make sure you’re not landing on a fake site

PayPal gift card fraud

There are a couple of PayPal gift card scams which work in different ways. One is where fraudsters advertise competitions in which PayPal gift cards will be given as prizes or rewards, which are designed to get victims to click through on links to unsecure sites and disclose personal details.

Another PayPal gift card scam which can impact people selling online can be when a criminal poses as a buyer, but asks the seller to also send them a PayPal gift card at the same time as the item they’re purchasing.

The buyer will then offer to pay for both the original item and the gift card, so the seller may think it’s a harmless way to make a sale and also help out a customer. However, once the gift card is shipped the criminal may be able to reverse the transaction and keep the card for themselves.

How to avoid PayPal gift card fraud

Be wary of competitions, emails and websites which offer prizes and rewards of PayPal gift cards If a seller insists on being paid by gift card it may well be a scam — keep clear

PayPal Facebook fraud

Facebook PayPal scams are particularly tricky because in this case you’ll often get a message from someone you’re already connected to on Facebook, asking you to help them out by making a payment from PayPal.

In this case the chances are that the criminal is using a hacked or stolen Facebook account to make it look like you’re talking to someone you know and trust.

They may ask you to send money to them urgently by PayPal — or even transfer you some funds on PayPal and ask you to pass it onto a bank account by wire. In this case, once you’ve sent the money in, they may be able to stop or reverse the original payment and leave you out of pocket.

In basic terms, if you’re asked to do something which looks odd or out of character — even by someone you’re connected to on Facebook — you should probably ignore it. If you’re really worried contact your friend by phone to ask if it’s really them before you take any action.

How to avoid PayPal Facebook fraud

Check any message sent on Facebook asking you to send money — the account may have been hacked or stolen Have different Facebook and PayPal passwords in case either of your accounts is hacked Don’t wire money or send PayPal payments to anyone unless you’re 100% sure of their identity

PayPal advance fee fraud

Advance fee fraud can take place online, via an email, or a message through social media. In any case you’ll be asked to pay a small amount of money to get a large reward.

This may be admin fees which have to be covered before a lottery win or inheritance can be released for example, or to pay the tax on a high value transfer that you’ve been promised. In all of these scams, there is no big pay out waiting — and you’ll struggle to get your money back.

There are huge numbers of variants on this advance fee fraud — but the good news is that most emails from scammers like these will be caught by your spam filter.

Be wary though, as scammers are smart and can take different approaches like contacting you via a stolen Facebook or other social media account, so it looks like it’s actually a friend sharing a great money making scheme with you.

How to avoid PayPal advance fee fraud

If something looks too good to be true it probably is — avoid Ask why you need to make a payment to get the money or reward offered Be as careful online as you would be if someone asked you to hand them over cash in person

PayPal phishing and fake hyperlinks

There are a few phishing scams PayPal warns about, including emails and social media messages which have embedded fake hyperlinks. These operate by tricking you to click a link or give away personal information which can be used to hack your accounts or steal money.

PayPal confirms it will never ask you to open attachments or download software in its emails to you. It also advises customers to look carefully at the sender details as well as keeping an eye out for small errors which can show the message is not real.

How to avoid PayPal phishing and fake hyperlinks

Don’t click on any links embedded in emails or other social media messages Look up the contact details for any company asking for payment, and call them to check the request Don’t give your passwords and account details out over the phone or by email — legit companies and individuals won’t ask for this

How to avoid scams on PayPal: summary

• Be cautious if any offer or deal looks too good to be true

• Check the legitimacy of any messages which claim to be from PayPal

• Don’t click on hyperlinks embedded in messages, and don’t download attachments

• Never send money to anyone you don’t know or trust

• Don’t share your password or account details with anyone

• Be as wary when interacting with people and companies online as you would be in person

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Send money internationally with a secure Wise transfer

Send international payments to 80+ countries safely — and hold and exchange 50+ currencies online and in the Wise app, with the Wise account.

Wise is a specialist in international transfers and multi-currency account services, fully licensed and regulated by a whole range of regulatory bodies around the world. Accounts have thorough verification processes and 2-factor authentication, with real time transaction notifications so you’ll always stay up to date with your finances.

Open a Wise account online or in the Wise app for free, to hold and exchange currencies with the mid-market exchange rate, and send and spend all over the world. You can also get a linked international debit card which you can use globally, and freeze and unfreeze in the Wise app with just a few taps.

You’ll still need to exercise caution when you send money with Wise — as criminals can try to trick victims on any financial platform — but you can trust that Wise has a cutting edge approach to security, and a 24/7 anti-fraud operation to keep customers safe.

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How does PayPal deal with scams?

Exactly what PayPal can do about any fraud or scam taking place on the PayPal site will depend on the situation.

In all cases you’ll need to first open a dispute with PayPal. Here’s how:

1. Select the Resolution Center at the bottom of the page

2. Tap report a problem

3. Find the transaction you want to dispute, and click continue

4. Select I want to report unauthorized activity or I didn't receive an item I purchased or the item I received was significantly not as described depending on the scenario

5. Click continue

6. Add the details of the issue to open your dispute

7. PayPal will be in touch to confirm the action they can take to resolve the issue

Will PayPal refund scams?

If the issue is that you’ve bought something online and never received it — or if the goods are not what was advertised — you may find PayPal buyer protections kick in and your case can be resolved with a refund from the seller.

If the issue is that you’ve been tricked into sending money to a criminal, you may need to report the case to the police.

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Exercising caution when sending money online, and being wary of phishing and scam messages, is essential. Unfortunately criminals work tirelessly to come up with new ways to trick people into handing over their money or account details, which means tactics are always evolving.

PayPal is a huge payments platform, so naturally has its share of scams — but the good news is that avoiding them is usually just a question of taking normal precautions and stopping to think before clicking a link, sending a payment, or handing over your personal details.

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Sources:

1. PayPal - Email scams
2. FBI - Phishing guidance
3. PayPal FAQ - Reporting fraud

Sources checked on 07.25.2022