If you’re a small business owner or online seller, you probably use PayPal on a daily basis. In fact, PayPal is one of the most common ways that online sellers accept payments for their goods and services. But as with any online interaction, there are potential risks to using PayPal as a seller.
Scammers take advantage of unsuspecting users by pretending to be customers and initiating transactions that result in the seller giving up their money – and often more – without receiving anything in return.
We’ll look at how to avoid being scammed on PayPal in this article.
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What You Should Know About Scammers on PayPal
There are two types of scammers on PayPal.
One type of scam involves imposters who pretend to be legitimate customers and initiate payments for items that didn’t exist, or that were never shipped. The other type of scam involves people who set up fake accounts to steal money from you. These scammers often prey on people who are new to using PayPal, or who only conduct a small amount of business via PayPal.
PayPal users are generally protected against credit card theft and fraud, but PayPal is the one area of the internet where you’re responsible for your own safety and security. If you use PayPal, be aware that scammers exist and take steps to protect yourself.
How Scammers Try to Take Advantage of Sellers
Scammers try to take advantage of sellers in a number of ways, including:
- Impersonation – scammers pose as legitimate customers by creating a fake email address and using a fake name.
- Payment confusion – scammers initiate a transaction with the seller, but use an incorrect account or payment type.
- Payment refusal – scammers initiate a transaction, but then refuse to pay, as if they never intended to buy the product in the first place.
- Account takeover – scammers hack into an existing account, change the account settings, and attempt to make a payment to a seller.
- Shipping charges – some scammers advertise a product at a low price, but then attempt to add a high shipping charge, as if the item were being shipped from a distant location.
- Payment amount – other scammers offer to pay for an item at a low price, but then attempt to send payment for a much higher amount.
- Payment type – yet another group of scammers attempt to send payment for an item via services like Western Union, MoneyGram, or a gift card.
- Payment delay – scammers often wait until payment has been deposited into the seller’s account before attempting to negotiate a lower price. If the seller refuses to lower the price, the scammer will then attempt to have the payment returned.
Fraudulent Invoices: A Common PayPal Scam for Sellers
Fraudulent invoices are a common scam among sellers on PayPal. Scammers send an invoice to a seller to cover goods that were never shipped or paid for. Admins can address and report these issues.
To protect yourself, be careful when accepting and reviewing invoices. Don’t accept an invoice unless you initiated it, and always carefully review any invoice before accepting and paying for it. If you have any doubt about the legitimacy of an invoice, contact the person who sent the invoice and attempt to clarify the situation. Don’t rush to pay an invoice if you have any suspicions about it – and in such cases, it’s best to pay by credit card, not through PayPal.
Marked-up Pricing: Another Common PayPal Seller Scam
Fake sellers often try to overcharge for goods that were never shipped, or even fictitious goods. To avoid becoming a victim of this type of scam, don’t purchase anything from sellers you don’t know and trust, and carefully review the details of any sale. Research the seller’s name and address, and try to find out as much information about them as possible.
If you pay another person and you later find out that the person didn’t actually ship the product or deliver the service you paid for, you likely won’t be able to get your money back. Always use a credit card when purchasing from an unknown or unverified seller – and don’t hesitate to dispute the charge if you don’t receive the product or service you paid for.
If you’re a small business owner or an online seller, you’re likely familiar with PayPal. While PayPal is a useful tool for accepting payments and easily integrates with other helpful services, it also attracts scammers who try to take advantage of unsuspecting users. By being aware of how scammers operate and understanding the different methods they use to try to take advantage of sellers, you can protect yourself from becoming a victim.