PayPal was founded back in 1998, and since then, it’s revolutionized online payments between individuals, businesses, and online marketplaces. However, whenever an online service—and particularly a financial service—gains massive popularity, the risk of scams skyrockets.
Whether you’re a frequent online shopper or a casual user sending money to individuals and businesses, understanding PayPal scams is crucial for protecting yourself from financial loss. This article will equip you with the knowledge and practical steps to avoid common scams and use PayPal securely.
Key Takeaways
- If possible, only deal with verified users on reputable websites. Look for buyer-seller protection programs when shopping online.
- Never send money for goods or services before receiving them unless the website holds your money while waiting for shipment.
- Beware of phishing scam emails and suspicious login requests. Don’t click on links or share login details via email, text, or phone calls.
- Enable two-factor authentication and turn on notifications so you can easily monitor account activity on PayPal and other money-sharing apps like Cash App.
How To Avoid PayPal Scams
Let’s take a look at some of the most common PayPal scams and how to avoid them.
PayPal support scams
This scam involves receiving an email, text, or phone call from someone claiming to be PayPal tech support or customer service. They’ll tell you there’s an issue with your account that needs to be resolved and ask you to log in via their website. If this scam happens on a phone call, they may request your login information over the phone.
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Once you share your login information with them, they can log in to your PayPal account and transfer money to themselves.
How to avoid the PayPal support scam
Avoid clicking links in emails and messages. Similarly, never share your login information or verification code on a phone call. PayPal will never ask for your login info or verification code. If you’re uncertain about a message, email, or phone call, you can always log in to PayPal’s website or app to verify your information, notifications, and official messages.
Online marketplace scams
Online marketplaces, like Facebook Marketplace, eBay, OfferUp, and others, offer a convenient way to save money on everything from bicycles to clothing to couches. However, this also means buying from strangers online, which always carries risks.
This scam happens when you offer to buy an item on an online marketplace and have it shipped to you. The seller requests payment through PayPal, Venmo, Cash App, Zelle, or another service. You pay them, and they tell you that they’ll ship the item, but they never do. Instead, they’ve taken your money, and the item you thought you’d bought probably didn’t exist in the first place.
How to avoid online marketplace scams
Beware of fake profiles that were created recently, have little or no previous sales, and no reviews. Scammers create new profiles all the time to find their next victim.
Additionally, many online marketplaces have built-in payment methods for buyers to use. These payment options generally have security features like holding your payment while the seller ships the item, reporting fraud or scams, and disputing payments. These features remove many of the risks associated with third-party payment options like PayPal.
Romance scams
The romance scam—also known as the “catfish scam”—happens when you meet someone online who lives in another city, state, or country, and you build a romantic relationship together. Then, when it comes time to meet in person, they ask you to send them money for plane tickets, train tickets, hotels, etc., via PayPal.
You’re emotionally entangled, so you send them the money. Once the money is sent, they suddenly stop responding and may even block your number and/or social media accounts. They just perpetrated the romance scam and ran off with your money.
How to avoid romance scams
Sending money to someone you haven’t met in person, even if they seem perfect for you, is generally not a good idea. Instead of sending a potential long-distance love interest money up-front, offer to reimburse them for travel expenses after they make the trip.
Phishing scams
This is one of the most common scams in the book due to its ease and the minimal expense of performing it. This scam occurs when you receive an email or text message that appears to be from PayPal, asking you to click a link. The message may either tell you that you’ve won a giveaway, information is needed to fix an issue with your account, or there’s a payment waiting for you to accept.
When you click the link, you’ll be taken to a fake PayPal website where, if you enter your login info, the scammers will steal your credentials. They can then log in to your PayPal account and transfer money to themselves.
How to avoid phishing scams
If you receive an email or message that appears to be from PayPal, don’t click any links or enter your login info. Instead, log in to paypal.com or open the PayPal app to verify any payment requests, receipts of funds, or giveaway wins.
In general, PayPal will not contact you outside of their app or website, and they will never request your login credentials or other sensitive information like your bank details or social security number.
Login verification scams
Scammers never stop finding new ways to trick you into giving them your information or sending money. In the login verification scam, you’ll receive an email or message stating that an unknown device has tried to access your PayPal account, and you need to verify the legitimacy (or illegitimacy) of this login attempt.
This type of message is designed to make you feel worried about the security of your PayPal account and create urgency, so you’re more likely to click a link and log in to a fake PayPal website. At that point, the scammers obtain your login credentials. You might not even know it happened.
How to avoid login verification scams
If you receive an email or message asking you to verify suspicious activity on your account, don’t click any links. Instead, log in to your PayPal account on your own through the normal channels like their website or app. Then, in PayPal’s security settings, make sure only approved devices have access to your account.
Additionally, if you believe your username or password is compromised, reset your password right away. It’s always better to be safe than sorry.
Conclusion
With the increase in PayPal’s popularity since its inception in 1998, scams have become increasingly common. By staying up to date with the latest fraud tactics, such as phishing, romance, and online marketplace scams, you have a better chance of avoiding financial loss.
To ensure your safety online, never share your login information via email, messages, or phone calls, and don’t click suspicious links.
Want to find out more? Check out our articles on How to Avoid Crypto Scams and How to Avoid Venmo Scams.
