PayPal Text Scams: How to Spot and Avoid Them

PayPal is the most popular way to send and receive money online, on mobile apps, and between friends, dominating online payment processing with a 45% market share. It has been around since 1998, making it one of the oldest and most well-known digital payment platforms. Today, it operates in over 200 countries and supports transactions in 25 currencies.

PayPal differs from other popular digital payment apps like Cash App, Zelle, and Venmo because it offers buyer protection. This means it will reimburse customers if they don't receive their order or if it's significantly different from what was described.

However, the more people rely on and trust the PayPal brand, the more incentive criminals have to exploit that trust.

Did you know?

PayPal has 426 million active users, including consumers and merchants.
PayPal's total payment volume reached $1.53 trillion in Q4 2023 across 25 billion transactions.
Up to 36 million merchants use PayPal in over 165 countries worldwide.
60% of consumers trust PayPal more than their bank for storing payment credentials.

(Source: chargeflow.io)

11 common PayPal Scams

Phishing emails/ texts. Scammers may attempt to deceive you with emails, texts, or links to websites that appear to be from PayPal. They may use various tactics to prompt your engagement, such as claiming that "Your account is about to be suspended," "You've received a payment," or "You've been paid too much." These messages often contain malicious links designed to steal your login credentials or financial information. Never respond to or click on anything that comes from a URL other than paypal.com.

Invoice and money request scams. You may receive fake invoices or payment requests through PayPal for products, services, or crypto you didn't order. Sometimes, the scammers' messages include an alarmist call to action and a request to call their fake customer service number. Don't pay, and don't call. Closely review all PayPal money requests and invoices before taking action.

Advance fee fraud. This scam involves promises of large sums of money, but first, you must pay a smaller upfront "fee" for taxes, legal documents, etc. Once you pay the fee, the scammers disappear without ever delivering the promised money.

Overpayment scam. A buyer sends an excess payment beyond the asking price and then asks you to wire back the overpaid amount. However, the initial payment was likely made with a stolen payment method and will be reversed, leaving you out of both the merchandise and the money.

What to do: If a customer overpays and requests a refund of the excess, consider canceling the order as it may be fraudulent.

The "Use My Shipping Service" Scam.

Fraudsters frequently try to manipulate shipping as part of their schemes targeting online sellers. One common tactic is when the buyer claims they can get you a discount or preferred rates by using their own shipping account or preferred vendor. They may say this vendor is cheaper, more reliable, or a service they've used for years. In an additional twist, the scammer may instruct you to wire the shipping fees directly to their "preferred shipper."

However, using the buyer's shipping account allows them to easily reroute your shipment to an alternate address after it has been sent out. The scammer can then file a complaint that the order was never received to their original address and demand a refund. Without proof of delivery to the proper address, you are left covering the costs of the merchandise, shipping fees, and the refund.

If you wire shipping fees to a bogus company controlled by the scammer, you've just directly sent them money. Often, the original payment for the order was made with a stolen credit card or bank account, meaning you may be liable for returning those funds to the legitimate owner once the fraud is reported.

Prepaid shipping label scam.

In this con, the buyer provides you with a prepaid shipping label they claim is discounted. However, by using their label, you give them full control over redirecting the package's destination to an untraceable address like a P.O. box or another country. Not only does this violate PayPal's seller protection policies requiring shipping to the verified buyer address, but the prepaid label was likely purchased with a stolen payment method, putting you at risk for covering those charges.

Package rerouting scam.

The scammer places an order with a fake or incorrect shipping address. Once the carrier attempts the failed delivery, the scammer contacts them, pretending to be you, and requests the package be rerouted elsewhere. After accepting the rerouted delivery, they can claim non-receipt to try getting a refund, leaving you with no way to prove where it ended up. You lose the merchandise, shipping costs, potential rerouting fees from the carrier, and any refund issued.

Because the shipment was rerouted, you can't prove the item was delivered to the address on the Transaction Details page. The scammer gets to keep the item and money. To make matters worse, you might also be required to pay an additional rerouting fee to your shipper.

Reshipping packages scam.

The scam is presented as a "work from home" opportunity requiring you to receive packages at your address and then reship them, often to overseas locations. You may receive various items (such as electronics, jewelry, or clothing) in the mail and be asked to ship them to another country. Your "employer" or “business partner” will provide you with a shipping label, which is usually paid for with a stolen credit card. Additionally, they may ask for your personal information, such as your Social Security Number and bank account details, under the pretense of setting up direct deposit for your paycheck.

In reality, you are unlikely to receive any payment and could expose yourself to fraud. Furthermore, the items you are shipping were likely purchased with stolen payment methods. By providing your personal information, you risk identity theft or having your account compromised.

Fake Business Opportunity.

Scammers claim to partner with you in selling products. They have you pay their "supplier," who ships valuables like gold to an address they provide—often updating your PayPal shipping address. When customers inevitably complain of empty boxes, the scammer blames you for the missing goods.

Prize winnings. Scammers promise you valuable prizes, high profits, or no-risk investments requiring you to first pay fees or taxes are nearly always scams aimed at extracting money with no payout.

Fake charities. In times of crisis, scammers solicit donations to fake charities, keeping the money for themselves. Always thoroughly vet unfamiliar charities before donating.

To avoid this scam, check the background of any charity to make sure your donation goes to real victims.

How to avoid PayPal scams and protect yourself

Do not pay or accept suspicious invoices, payment requests, or money transfers through PayPal that you did not initiate.
Report any unauthorized charges through the legitimate PayPal website or app.
If a customer overpays you and asks you to wire them the difference, consider canceling the order—it's very likely to be fraudulent.
Decline any request from the buyer to use their prepaid shipping label, which could route your package elsewhere.
Always ship to the address shown on the official PayPal Transaction Details page for that order.
Use only your own shipping accounts and carriers you know and trust.
Scrutinize orders demanding you use the buyer's preferred shipping method, as stolen payment credentials may be involved.
Never provide sensitive personal or financial information to someone you don't know and trust.
Never give your private personal or financial information to anyone you don't know.
Don't list someone else's address on your PayPal account.
When in doubt, use Scamio. Never respond to unsolicited messages claiming to be from PayPal, as they could be phishing attempts to steal your information.

Instead, copy/ paste the text and check it with Scamio.

Scamio is our AI-powered tool dedicated to helping you identify and avoid potential scams. When unsure about an email, you can check it with Scamio on WhatsApp, Facebook Messenger, or a web browser. It's free and easy to use. Copy/ paste a text or link, describe the situation, and upload the image or the QR code you want to verify. Scamio will analyze the data and tell you if anyone is trying to scam you. You can also help others stay safe by sharing Scamio with them.

You can also help others stay safe by sharing Scamio with them in France, Germany, Spain, Italy, Romania, Australia, and the UK

Q&A

Will PayPal refund me if I get scammed?

PayPal does offer some protection through its Purchase Protection program. If you pay for an eligible item through your PayPal account but don't receive it or it arrives significantly different than described, you may qualify for a refund. However, whether you'll be covered depends on factors like following PayPal's policies and requirements.

Can I trust PayPal with my Social Security Number (SSN)?

When signing up for a PayPal account, you are required to provide your SSN. PayPal utilizes advanced encryption along with other industry-standard security measures to protect sensitive personal and financial information like SSNs. However, you'll want to ensure you're on the legitimate PayPal website or app before entering your SSN to prevent potential phishing scams from capturing that data. While PayPal has safeguards, caution is still advised.

Is PayPal safer than other payment apps?

PayPal is generally considered one of the safer digital payment options compared to some other apps and services such as Cash App, Zelle or Venmo. It has been around for decades and uses advanced encryption, fraud monitoring, and protection policies like Purchase Protection to help safeguard users. However, no payment method is 100% immune to scams. Caution and vigilance are still required from users on PayPal or any payment service to avoid falling victim to evolving fraud tactics.