The 5 Top PayPal Scams of 2020 (and How to Avoid Them)

Learn how scammers try to get your money and info

PayPal is one of the most popular payment processing services in the world, which makes it an ideal target for scammers looking for the best odds of getting someone’s personal information or money. Here are some of the top PayPal scams to watch out for.

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Overpayment Scams

PayPal Overpayment scams

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Overpayment scams really only impact people selling online, but that covers nearly any site that uses PayPal for handling payments. There are some variations, but the scam usually works a similar way.

Alongside overpayment scams, eBay has gift cards scams, while there are a variety of Craigslist scams to look out for.

Someone buys an item you have for sale, but they overpay for that item through PayPal. They’ll then send you a message saying they mistakenly overpaid and ask you to send back the excess amount. The problem really arises when they ask the overpaid amount to be sent back via a different method, usually gift cards, a wire transfer, or a cashier’s check. Later on, you’ll receive some kind of notice that the original purchase was fraudulent, and you’ll need to return the full amount to the actual owner of the account or card used. Then, you’re out the overpaid amount.

Sometimes it’s not as clear cut as this. A common variation of the scam involves the buyer sending extra to pay for a specific shipping service or asking you to return the overpaid amount to a third-party for shipping. Of course, that third-party is actually the scammer.

The only real way to avoid this one is to never send money outside of PayPal. You can’t really control who purchases your items, but you can control what you do after the transaction. If someone tries this one, send the money back via PayPal or refund the transaction altogether.

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Advanced Fee Scams

PayPal advanced fee scams

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Many people have heard of the infamous “Nigerian Prince” scam in which someone claiming to be a Nigerian prince asks for a small financial advance in order to free up their considerable fortune, and in return, they’ll repay a much larger sum. That’s a classic example of an advanced fee scam, and unfortunately, they’re still fairly common. PayPal has only made it easier for these scammers to collect.

A more common version of the scam to target PayPal users involves receiving an email claiming you’ve received some sort of settlement or inheritance. The scammer will often pose as a bank or lawyer and claim to need some sort of fee upfront in order for you to claim the full amount.

Most email services will automatically filter out these type of emails, but some still find their way through. These scams are easy to avoid. Just delete the email.

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Phishing Emails

PayPal Phishing scams

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There are a lot of variants here, but they all come down to phishing, a practice scammers and hackers use to trick you into giving up your account information. They’ll usually send you links to fake sites or emails requesting your information.

It might seem obvious not to open these emails or follow the links, but phishing scammers are really good at what they do. The more sophisticated scammers will spoof PayPal email addresses, making it look like the email is actually coming from PayPal. Then, they’ll create a fake site that looks exactly like PayPal to collect your info. This is also known as pharming.

Avoid this one by scrutinizing everything in the emails you’re sent. All official PayPal links will have the “paypal.com” domain name, and you can look at the site itself for inconsistencies. It’s also important to remember that PayPal doesn’t send these sort of emails in the first place, and you can always verify any email you receive by contacting them through the official channels that they provide.

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Fake Charities and Investment Opportunities

PayPal fake charity scams

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This one is fairly obvious. There are plenty of fake charities and “too good to be true” investment opportunities out there, and they’ll often try to get you to send money via PayPal.

When it comes to charities, scammers will often reach out around the time of a tragedy or natural disaster in an attempt to take advantage of the chaos and media coverage. They also like to use times when people are generally more charitable, like around the holidays, to profit from people’s good will. It’s simple enough to check if a charity is, in fact, genuine through agencies like the Better Business Bureau, as they try to keep updated lists of all registered charities.

Investment opportunities are somewhat strange, but there really aren’t any legitimate cases where someone would contact you out of nowhere with an investment opportunity, especially if you don’t already know them. As always, if it sounds too good to be true, it is.

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Shipping Scams

PayPal shipping scams

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Shipping scams are one of the craftier ways scammers try to get your money or your items. Like with many of the others on this list, there are a few variations of this one.

Most of the time, it begins when someone buys an item you have for sale, then they ask to use their own shipping service. Maybe they’ll ask you to pay for it out of the money they sent. Sometimes, they’ll offer to pay themselves or send you a label. In any case, they’ll want to set up shipping outside of PayPal, possibly with their own account.

After you ship the item, the buyer will be in control. They can reroute the package to another address if they choose. Worse, you have no record that the item actually shipped, allowing the buyer to then open a case stating you never shipped the item. Since you can’t prove you did, they’ll get both the item and the money, leaving you with nothing.

The solution here is fairly obvious. Never let a buyer control the shipping. Always ship through PayPal when possible. Otherwise, use your own reputable shipping company with tracking information.