PayPal appeals to many consumers by offering a safe, hassle-free way to purchase items online without handing over personal information, such as credit card numbers, to merchants. Unfortunately, enterprising scammers are impersonating PayPal to take advantage of that trust and swindle unwary online sellers.A victim from Texas, who we’ll call Jane, recently contacted NCL’s Fraud Center. As a seller at an online auction site, Jane had done everything right. She listed a woman’s Rolex watch on eBay and was notified that a buyer named Joy Morgan had won the item for $3,800. Jane then received an email, purportedly from PayPal, stating that, in order to get paid, she first needed to send the Rolex in the mail and email the buyer the tracking number. Susan was initially uneasy about sending a valuable item to a buyer without receiving any payment, so she called the number provided in the email and spoke with what she thought was a PayPal representative that assured her that it was a standard procedure for all first-time sellers. Jane sent the item but, after not receiving any money in her account, contacted PayPal’s main customer service line. That’s where she heard the bad news: she had been scammed. Both the official looking email, complete with PayPal logos, and the friendly customer service representative she initially spoke with were frauds. Jane is out close to $4,000 and has little hope of ever getting her money back.
Scammers have become extremely sophisticated with the tools they use to trick consumers into opening their wallets. NCL’s Fraud Center has received reports of scammers creating realistic looking Web sites, emails, and hotlines all designed to fool unsuspecting consumers into believing they are dealing with a legitimate business. Don’t be fooled! Use caution and common sense with any online transaction.
Double-check the company’s information. A familiar name or brand on an email, in a letter or mentioned over the phone doesn’t guarantee that the deal is legitimate. Crooks often pretend to be from well-known companies to gain people’s trust. Find the company’s contact information independently, online or through directory assistance, and contact it yourself to verify the information.
Understand how online auctions works. Make sure you know the procedures regarding the payment and delivery of purchased items. If you get an email or call asking you to do something outside of standard operating procedures, it should be an immediate red flag.
Understand PayPal’s procedures. According to PayPal’s fraud FAQ, emails from PayPal will always address you by your first and last name or the business name associated with the account. Watch out for emails addressed to “Dear PayPal User” or “Dear PayPal Member.”
Inform auction sites and payment services about suspected fraud. They may have policies to remove sellers or buyers from their sites if they use “shills” or don’t live up to their obligations. Forward fraudulent PayPal emails to firstname.lastname@example.org.
Try mediation to resolve disputes. Not all problems are due to fraud. Sometimes people simply fail to hold up their side of the bargain in a timely manner or there may be an honest misunderstanding. Some auction sites provide links to third-party mediation services that help users resolve disputes. There may be a small fee that is usually paid by the party who requests the mediation.
Check out the seller or buyer Most auction sites have feedback forums with comments about the sellers based on other people’s experiences, but many sites also allow sellers to review buyers, which can provide pertinent information about a buyer who consistently creates payment issues and who is best avoided.