PayPal has become a nearly ubiquitous payment method in e-commerce. Customers appreciate the ability to make payments with a single login rather than having to enter their credit card number, expiration date, security code, and billing address each time.
So many customers prefer PayPal and because it’s relatively simple to integrate into an existing checkout page, most e-commerce merchants now accept PayPal as one of the payment options.
Despite its benefits, PayPal shares one disadvantage with traditional credit card payments: fraud. PayPal, like any other payment processor, is subject to an onslaught of scams and fraud attempts aimed at taking money from someone else’s pocket. Scams on the internet are constantly changing. In 2019, internet crimes cost a record $3.5 billion in losses, according to the FBI.
Con artists from all over the world are probably currently aiming for a computer or mobile device close to you. Let’s go over the most common PayPal scams and how e-commerce merchants can avoid becoming victims of them.
Take note, if you’re a regular PayPal user: Scammers frequently target PayPal and its customers. Individuals making purchases, people receiving personal payments from friends and family, and self-employed people using PayPal for business are all vulnerable to these scams.
What is a PayPal Scam?
PayPal scams can take the form of emails, phishing sites, malicious advertisements, suspicious links, and other methods.
Such scams are designed to appear official in order to trick users into disclosing private information, such as usernames and passwords, or to fraudulently collect payments. There are numerous PayPal scams, but there are a few that you are more likely to encounter.
PayPal scammers are constantly improving their methods, making it increasingly difficult to tell if a fake PayPal email, link, or site is genuine. If you are not cautious and attentive, you may fall into the trap of mistaking a scam for one that is legitimately connected to PayPal.
The result could be a significant financial loss with no way of recovering the funds. If you suspect an email or link related to PayPal, it is critical that you report it. This will assist PayPal in combating these scams.
Paypal Shipping Address Scams
Following a purchase and payment to the seller’s PayPal account, the scammer requests that the purchased item be shipped to an invalid delivery address.
The shipping company marks the item as undeliverable in their system after several failed delivery attempts. After that, the scammer contacts the shipping company and provides them with a new, valid shipping address.
After receiving their shipment, the scammer files a complaint with PayPal claiming that the item was never delivered. Because their transaction detail only shows the original, invalid address, the seller has no proof of delivery.
There are other methods clever crooks will use to steal your money through PayPal.
Unlike unsolicited emails that direct you to bogus PayPal websites, these scam methods involve engaging you on the genuine PayPal platform. There are several common PayPal scams involving shipping addresses:
- Buyer prefers a specific shipping method – the buyer will request that you ship their item using their preferred shipping company. They may claim a discount, that the shipping speed is faster, or any other reason. If you agree, the buyer can simply contact their shipper and request that the package be rerouted to a different address. They then contact PayPal and file a non-receipt claim, requesting a full refund. You’re out the money, the item, and even the shipping fees because you can’t prove the item was received.
- Buyer supplies their own shipping label – occasionally, a buyer will offer to send you a pre-paid shipping label. They may claim to have a lower rate or provide a generic explanation. If you use their shipping label, the buyer has the option of rerouting the package to a completely different delivery address, claiming they never received the item, and requesting a full refund from PayPal. The shipping label could have been purchased with a stolen credit card, putting you in even more danger.
- Buyer provides a fictitious shipping address – the buyer provides a fictitious delivery address When the shipping company is unable to deliver the package to that address, the buyer steps in and provides a new, valid delivery address. When the package is rerouted and delivered, the buyer files a claim with PayPal claiming they never received the item.Because the final delivery address differs from the address listed on the Transaction Details page, PayPal will most likely issue a refund.
These scams work because PayPal only protects sellers who have proof of delivery to the address listed on the Transaction Details page.
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How Do They Get Their Hands on Your Shipping Address?
Many well-known websites are spoofing in various ways. Scammers who create a fake PayPal website and attempt to collect user information are usually part of a phishing scam.
Phishing is a set of techniques used to impersonate trusted entities in order to trick victims into disclosing personal information. They create fraudulent websites and email addresses that appear legitimate. The goal is for you to interact with the fake site and eventually provide private information such as usernames, passwords, financial account information, or anything else that can be used to steal money or your identity – and most importantly your shipping address.
There are many phishing websites out there, and phishing sites are now a far more common type of fraudulent activity on the web than malware sites, according to Google’s Transparency Report. In fact, phishing sites outnumber malware sites 8 to 1, which means you’re far more likely to come across a phishing site designed to look real and steal your information than a site attempting to install malicious software onto your computer.
You’ll notice right away that this scam website looks exactly like an older version of PayPal’s website. Without looking at the details, it’s easy to believe this site is genuine. However, there are a few things you can do to avoid falling for phishing site traps like this one.
You should also be on the lookout for phishing scams disguised as promoted or shared social media posts. TNW reported on one such scam that Twitter permitted to spread, in which the scammer purchased ad space and pretended to be an official (albeit unverified) Twitter employee, offering users the chance to win Twitter-sponsored sweepstakes.
The scam directed people to a phishing website that appeared to be a legitimate Twitter page. The ultimate goal was to get users to enter their username and password into the form, which would then collect private information rather than log them into PayPal.
How to Protect Yourself from PayPal Scams
PayPal security necessitates vigilance and common sense. Here are some precautions you can take to protect your PayPal account from shipping address fraud.
Dealing with PayPal scam emails
- Email links should be avoided. Only click on email links if you are certain the email is genuine (e.g. you asked the sender for the message or are otherwise expecting such an email). It is far safer to log in to your PayPal account directly in your browser or app and check to see if the email’s contents are legitimate.
- Examine the email address of the sender. By looking at the sender’s actual email address, you can easily identify spam emails. Don’t rely solely on the display name. Anyone can make a legitimate-looking display name, but it is more difficult to impersonate a legitimate email address. When you click or tap on the sender’s display name, the true email address hidden behind the display name is revealed. PayPal only uses the email domain @paypal.com.
- PayPal emails that do not address you by name should be ignored. PayPal emails that are legitimate will always include your full name (exactly as shown on your account). “Dear Customer” or “Hello PayPal user” greetings indicate a scam attempt.
- Delete PayPal emails that request sensitive information or the download/installation of software. PayPal states on its website that it will never send you an email requesting sensitive information such as your password, bank account information, or credit card information. They will also never send you an email requesting that you download or install software.
Other strategies to avoid PayPal scams
- Don’t send money outside of PayPal for platform transactions. Legitimate buyers rarely overpay, but mistakes do happen. Should a buyer overpay you and cancel the transaction? Don’t comply with their request to refund them to another account.
- Use your own shipping method at all times. When you select the shipping method, you have complete control over delivery and will not be subjected to bogus shipping labels or rerouted packages.
- Ship only to the address specified on the Transaction Details page. When you ship only to this address, you meet one of PayPal’s Seller Protection program requirements.
- Stop your shipping company from rerouting packages. Contact your shipping company and request that this layer of protection be added to each shipment.
- The buyer cannot reroute your package, receive it somewhere else, and then claim that it was never delivered.
- Deal with only verified buyers and sellers. When a PayPal account holder takes the time to verify their account, it is a good indication that they are not a scammer. Proceed with extreme caution if you do business with unverified PayPal accounts.
How to Report a Fake PayPal Email for A Shipping Address Scam?
PayPal has a dedicated email address where you can report any fake emails and they will investigate – [email protected] If you provided any personal information after receiving a scam email, immediately log into PayPal and change your password and security questions.
You can also call Action Fraud at 0300 123 2040 or use their online reporting tool to report it. Your email provider can also assist you. Most email providers have a report function where you can mark an email as junk and then mark it as a phishing scam, which will then report the sender.
Safeguard Your Assets With Global Payback
It’s safe to assume that you are being scammed if anyone asks for your bank or personal information.
Never divulge personal information to anyone who contacts you directly on the internet. Make sure to use a secure server and a reputable website whenever you need to conduct a financial transaction online.
Change all of your passwords right away, remove any malicious software you may have downloaded, and, if necessary, contact your credit card company if you think you’ve been scammed. To report the scam and receive assistance with the next steps, get in touch with your neighborhood law enforcement agency.
You can also get in touch with Global Payback, a reputable business that assists people who have been defrauded or had their personal information stolen.
PayPal is one of the world’s most popular online payment services, and for good reason. It provides buyers and sellers with a simple, convenient, and secure way to exchange money with almost anyone, anywhere, and in a variety of currencies.
To maximize your safety when using PayPal, be aware of the various ways scammers will attempt to steal from you. Understanding the most common PayPal scams and how to avoid becoming a victim will keep your PayPal account safe.