Fraudsters are Lurking Around on PayPal; Here's how Users Can Stay Protected

PayPal scams are on the rise, and they're getting more sophisticated by the day. With online payment fraud exceeding $48 billion in 2023, it's clear that users need to stay vigilant. Adding to the concern, PayPal recently disclosed that nearly 35,000 of its users had their accounts compromised in a credential-stuffing attack in January 2023. If you're among the millions of PayPal users or have received suspicious emails claiming to be from the company, it's important to be aware of the warning signs of such schemes.

Online scams, targeting PayPal and other platforms, typically aim to extract sensitive information and gain unauthorized access to users' systems and linked accounts. PayPal scammers deploy various tactics, including phishing methods, fake invoices, hijacked accounts, and manipulations of shipping addresses, all in order to deceive customers into sharing their personal information and, ultimately, their hard-earned money.

One common tactic used by scammers is to entice customers into making overpayments. In such scenarios, a buyer may send an excessive amount of money via PayPal and then request a refund from the seller through a bank or online transfer, and often, these are traps set by fraudsters. Once the seller agrees to process the refund, the fraudster will withdraw the original transfer via PayPal, leaving the buyer at a loss as they forfeit the refunded amount and are unable to reclaim it.  

Scammers also often target sellers by exploiting the supposed involvement of shipping companies, particularly when dealing with large or bulk items that are challenging to parcel or ship. In this scheme, scammers make a brazen move by proposing to use a haulage company for the delivery of these oversized items. They assure sellers that transport costs will be covered within the PayPal payment and leverage the credibility of well-known brands to gain trust.

The scam unfolds when unsuspecting sellers fall into the trap and receive fake transport receipts, only to realize later that the purported haulage company is non-existent. At this point, the scammer disappears, after they've stolen the money, leaving the seller with nothing but lost funds and a failed deal.

But that's not the only threat on the payment platform, since another fraudulent scheme prevalent on PayPal involves fraudulent Bitcoin invoices. Operating through fake PayPal Business accounts or hijacked legitimate ones, scammers pose as entities like "Bitcoin Exchange" to lend credibility to their scheme. They send fake invoices or receipts for Bitcoin purchases, tricking recipients into believing they owe money. If victims call the listed number to dispute the charge, scammers exploit this opportunity to levy fees for purportedly reversing the transaction, steal personal information, or perpetrate further fraud. 

By staying informed about common scam tactics, verifying the authenticity of transactions, and promptly reporting suspicious activity, users can help protect themselves and others from falling victim to such scams. In addition to that, ongoing efforts by PayPal and law enforcement agencies to educate users and combat fraudulent activities are also essential in mitigating the prevalence and impact of these scams on users.