PayPal is very popular and, as I always say, anything popular with the public is very popular with scammers. Over the years I have written about many scams involving PayPal, but one I have not written about until now relates to its Friends and Family Payment option. When you buy something using its Goods and Services option PayPal offers an excellent PayPal Purchase Protection program by which if you are scammed by a phony seller, never receive the item you intended to purchase, receive an item that is counterfeit or otherwise not what was represented to you or even if someone manages to take over your account and makes an unauthorized purchase using your account, PayPal will refund you the full amount of your purchase. This warranty can give you great peace of mind when using PayPal.
PayPal also has another payment option called Friends and Family which is intended for use in situations such as making a gift, splitting a lunch tab or sending money to someone you know very well. It is not intended for commercial purposes. When you use the Goods and Services PayPal option you are charged a small fee, but when you use the Friends and Family option and pay from your PayPal account or your bank account tied to your PayPal account there is no fee. However, when you use the Friends and Family option, you do not get the PayPal Purchase Protection Plan. Scammers offer something for sale and then ask to be paid by PayPal using the Friends and Family option to save a little money. Many people comply with this request and have few options to get their money back once they have been scammed.
TIPS
The lesson here is a simple one. Whenever you are buying anything using PayPal, you should use the Goods and Services option. Only use the Friends and Family option for small gifts or payments to friends and family and, even then, you shouldn’t use it for purchases from friends and family because scammers may pose as your friends and family.
If you do fall for such a scam, contact your bank or credit card company as soon as possible and ask for a chargeback, which you may be able to get.
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