Beware of PayPal tricks: fraud by circumventing buyer protection - warning from financial experts

Beware of PayPal tricks: fraud by circumventing buyer protection - warning from financial experts

According to a report by n-tv.de, the Hamburg consumer advice center and the Hamburg police warn of a Paypal trick that criminal operators of fake shops use. These make use of the Paypal payment function “send money to a friend”, which bypasses buyer protection and amounts of money paid cannot be reclaimed. Affected consumers have increasingly contacted the Hamburg consumer advice center. Payment via a Paypal link in fake shops is often configured in such a way that the purchase amount and the “Send money to a friend” option are preset.

However, PayPal buyer protection only applies to the “Goods and Services” payment function, not to “Friends and Family”. Fraudsters take advantage of this fact. It is therefore important that consumers be careful not to transfer money to friends and family as a personal payment, but rather to actually pay for items or services. The corresponding payment function is shown by Paypal or can be identified by a gift symbol.

The impact of this scam can be significant for both the market and the consumer. Fake shops can increase their sales because the Paypal payment method makes them appear more trustworthy. Consumers, on the other hand, can lose their money because they have no way of reclaiming payments made. This scam could undermine consumers' trust in PayPal as a secure payment method and lead to a decline in PayPal usage. Consumers should therefore be particularly careful and ensure that they choose the right payment option to avoid fraud.

Source: According to a report by n-tv.de, link