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Does PayPal Refund Money if Scammed?

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Have you ever bought a product only to discover that it is faulty, broken, or far from what you expected? Well, you got scammed. So, what to do then? Does PayPal refund money if scammed?

Unfortunately, not in every case does PayPal refund your money. To get a refund, you need to meet provided specific conditions first. In the event of a fraudulent transaction after purchasing through PayPal, your funds are typically reimbursed.

However, if these conditions aren’t satisfied, using PayPal is akin to handing over cash. Should PayPal be unhelpful, consulting your bank is an alternative option. Moreover, you shouldn’t contact PayPal until you know it’s a scam.

PayPal’s purchase protection

When purchasing with PayPal, it falls under their Purchase Protection policy. This policy commits to refunding your money if you either don’t receive the item you ordered or receive an item significantly different from its advertised description.

If your purchased item is eligible and falls under PayPal’s Purchase Protection, PayPal should address your scam claim. You can do so through the Purchase Protection program, reimbursing you if you don’t receive the item or if it doesn’t match the seller’s description.

In the event of a scam, opening a dispute allows the seller to present their side of the story, and PayPal may not always side with the rightful party. It means that even real scam victims may find PayPal favoring the seller, leaving them without assistance.

However, before relying on the platform, it’s essential to familiarize yourself with PayPal’s refund policy. You won’t get a refund for such purchases as real estate, travel tickets, prepaid cards, or custom-made items.

Furthermore, PayPal’s Purchase Protection safeguards all users against unauthorized charges. However, PayPal determines the policy’s application on a case-by-case basis. It can sometimes lead to frustration for scam victims.

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I got scammed on PayPal: What to do?

Contact the seller

First, consider reaching out to the seller for a direct resolution before escalating the issue with PayPal. Their cooperation may prevent unnecessary suspicion.

If the seller remains unresponsive, you can file a dispute with PayPal, but remember to initiate this within 180 days of your purchase from the seller.

Use PayPal’s Purchase Protection

To utilize PayPal’s Purchase Protection and open a dispute with the seller, follow these steps:

  1. Sign in to your PayPal account and access the Resolution Center.
  2. Click Report a Problem and select the transaction you suspect is fraudulent.
  3. Proceed by choosing I Want to Report Unauthorized Activity to initiate the dispute.
  4. PayPal grants you a 20-day window to contact the seller and seek your refund.
  5. You can escalate the issue if the seller remains unresponsive. This situation allows PayPal to mediate.
  6. Await PayPal’s response.

The resolution process hinges on the seller’s response. If they cooperate, an immediate refund may be possible. If not, after 20 days, a PayPal employee will review your claim, considering evidence from both parties to determine whether a refund is warranted.

Purchaise protection

Make a Section 75 claim

Inform your card provider that you intend to make a Section 75 claim. Your card provider, the company that sends you your statements, has its contact details available on their website. It’s best to make this request in writing.

For those with a joint credit card, the main cardholder should be the one to contact the card provider.

In your written communication, clearly state your requests:

  1. Request a full refund of the amount you paid or the cost of repairing a faulty item.
  2. Ask for compensation for issues related to poor quality or if the seller misled you.
  3. Seek reimbursement for any expenses incurred in repairing damage caused by a defective item or service.

If your claim succeeds, your card provider will refund the funds to your credit card.

Make a chargeback claim

Inform your card provider of your intention to initiate a chargeback claim. It’s worth noting that your credit provider might use different terminology for chargeback, such as ‘disputed transactions,’ but requesting a chargeback will ensure they understand your intention.

When you contact them, clearly state your request for either:

  1. A refund of the amount paid with the same card (payments made using other cards or methods won’t be included).
  2. Compensation for the issue may be less than the full amount you paid.

If your claim is successful, your card provider will refund the funds to either your card or bank account.

It’s essential to be aware that the trader can contest your refund, even if you’ve already received the money. Your card provider will reach out if a challenge occurs. It’s prudent practice to retain the funds for a few weeks in case their challenge proves successful.

If your claim is unsuccessful, you can inquire with your card provider about the utilization of the appeals process.

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When does PayPal’s purchase protection not work?

There are some cases when you should not expect to get your money back. PayPal will not grant your request to get a refund in these situations:

Misleading product descriptions

Sellers frequently provide a substitute item, superficially similar to the advertised one but of far inferior quality. Therefore, you will not get your money back if the received product is as in the description.

Counterfeit product

Some sellers peddle fakes to fool customers into thinking they’re buying an authentic product. Some situations occur when the customer gets a product that is missing features that you wouldn’t necessarily notice at first.

Unfortunately, you will not be eligible for a refund if your dispute is opened after the deadline of 180 days has passed.

Return request

It’s standard practice for sellers to demand returns before issuing refunds. Unfortunately, some sellers use this loophole to get out of giving full refunds. If the shipping fee is higher than the amount being refunded, many customers will just not bother returning the item.

In the world of dropshipping, this is a common practice. Products sold by drop shippers frequently come from far away. Assuming the item is inexpensive, the cost of shipping may exceed the amount you get refunded.


Will PayPal cover me if I get scammed?

All purchases paid for using a PayPal account or through its website are protected by our Buyer Protection policy. Besides other things, you have to make a dispute within 180 days of your purchase or payment to qualify for Buyer Protection.

How do I get my money back on PayPal if I’ve been scammed?

To recover your funds on PayPal after a scam:

  1. Contact the Seller: Reach out to the seller to discuss the issue, as it might be a misunderstanding.
  2. Open a Dispute: Log in to your PayPal account, visit the Resolution Center, and initiate a dispute for the transaction. Select the appropriate reason, like “Item Not Received” or “Significantly Not as Described.”
  3. Provide Evidence: Share evidence, such as receipts and communication with the seller, to support your claim.
  4. Await the Seller’s Response: Once you open a dispute, PayPal will notify the seller, allowing them to respond.
  5. PayPal Mediation: If the seller doesn’t resolve the issue or an agreement can’t be reached, escalate the dispute to a PayPal claim for mediation.
  6. Resolution: PayPal decides if your claim is valid, and they will refund your money.

Remember, that you have only 180 to do this.

Does PayPal refund the buyer?

PayPal will refund your money if the purchased product is not delivered or does not match the seller’s description.

Does PayPal refund everything?

You can ask for a partial or full refund. When you get a full or partial refund, the case is considered resolved. The buyer has the option of accepting or rejecting your offer of a partial refund if it is less than what was asked.

How to get a refund from a hacked PayPal account?

Unauthorized transactions may occur if your PayPal account is compromised. Get in touch with PayPal ASAP so that they can fix the problem and protect your account.

Paypal may start an investigation to reverse fraudulent transactions and issue a refund to you by their Purchase Protection policy.

What are overpayment PayPal scams?

The overpayment scams affect a seller’s account. In most cases of an overpayment PayPal scam, the buyer overpays for an item or uses an invalid shipping address and claims it was a mistake to request you return the difference.

Even though it looks like an innocent mistake, in reality, a hacker is using a compromised account or stolen credit card to make an unauthorized transaction and purchase a product. This method allows them to get their hands on the money.

However, in rare cases, an overpayment may occur when a PayPal user makes a payment using PayPal or a similar service and inputs an incorrect amount or shipping address.

To distinguish the fraudster, notice if they are anxious to recover their overpayment after pretending to be a buyer.

People who engage in PayPal scams usually demand that you reimburse their overpayment by wiring money to them. They tend to turn hostile if you react with even the slightest hint of mistrust.

📚Related: How to Recover Stolen Cryptocurrency

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Živilė Šarkauskaitė

Živilė is a writer with a diverse background, having worked with tech start-ups and pioneering brands across various industries. Her profound interest in progress and innovation drives her to the field of Fintech, a realm that sparks her curiosity and inspires her to share insights with others.

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Please be advised that the information presented in this article is intended for general informational purposes only. It should not be construed as professional advice from swissmoney. It is important to note that swissmoney does not act as a financial adviser, and individuals are strongly encouraged to seek independent advice from qualified legal, financial, or accounting professionals before making any decisions related to cryptocurrency investments. Furthermore, investing in cryptocurrency assets carries inherent risks, and individuals should be aware that they may potentially lose all of their invested capital.
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