With more than 25 billion transactions and counting, PayPal stands as a major player in online payments — with a history that stretches back to 1998. As an option for online shops, it’s been the official payment partner of eBay for more than 20 years running, and plenty of people use it on Facebook marketplaces, just to name a few of the ways people use it every day, which makes it an attractive platform for scammers. Like Venmo, PayPal has its list of top scams on the popular payment platform that they cover in detail on their “Common Scams” page. That list includes:

  • Phishing email/message
  • Invoice and Money Request scams
  • Advance fee fraud
  • Overpayment scams
  • Prize winnings
  • High-profit, no-risk investments
  • Fake charities
  • Shipping scams
  • Prepaid shipping label scams
  • Package rerouting scams
  • Business/job opportunities
  • Reshipping packages scam
  • Employment scams

Broad as these categories are, different PayPal scams share many similarities. When you know what to look for, you can avoid them.

Avoiding PayPal scams

PayPal is one of the most popular online payment platforms, making it a prime target for scammers looking to exploit unsuspecting users. This guide will provide practical tips and advice on how to identify and avoid PayPal scams, ensuring your online transactions remain secure.

Use different methods for paying people and businesses

PayPal offers a couple of different options for transactions. For people you know and trust, there’s the “For Friends and Family” option. When dealing with legitimate businesses or people you don’t know, like a purchase on a Facebook marketplace group, use “For Goods and Services.” Per PayPal, “you can use this type of payment when you pay for an item you won in an auction, buy merchandise online, download a digital item, or something similar.” Doing so covers you with PayPal’s Purchase Protection policy.

Don’t wire money to someone you don’t know

Wire transfers are practically final. Once that money gets sent, it’s gone and it’s tremendously tough to recover. That’s why many banks have strict anti-fraud measures in place when it comes time to place a wire transfer. Whether someone asks for a wire transfer for “overpayment,” to claim a “prize,” to cover “shipping,” or countless other reasons, it’s a scam. Always handle transactions, including any legitimate refunds, through PayPal.

Watch out for phony charities

Sadly, scammers will dive to new lows by impersonating a charitable organization. They’ll often ask for donations via PayPal. If you’re considering giving, do a background check on the organization and see if it’s legitimate — and how much of the donations they receive go toward their cause. Use resources like Charity Navigator, Better Business Bureau, and Charity Watch.

If it’s too good to be true

Plenty of PayPal scams revolve around investment opportunities, get-rich-quick schemes, and lottery winnings. The scammers behind these will throw in a healthy dose of urgency for you to act now. These are sure signs of a scam. Stop talking with anyone who promises something that sounds too good to be true. In the case of prizes and lotteries, never pay to get your winnings. Legitimate organizations won’t require you to pay to receive it.

Only use your shipping account

Plenty of PayPal scams use shipping methods to rip off victims. In some cases, scammers ask sellers to use a pre-paid label they provide, which may have been paid for with a stolen card. Likewise, using their shipping label lets them reroute the package, which can lead to fraud. PayPal strongly recommends only shipping to the address on the Transaction Details page, and with your own shipping account.

Watch out for phony payment notifications

Another common scam involves emails to the effect of, “Thank you for your $1,500 payment to Apple” or something similar. Of course, you never made that purchase and you’re immediately worried about that amount. Conveniently (and suspiciously), that email includes a link you can click to “verify” the purchase. True to form, that link leads to a scam site. Always log into your PayPal account and check your transaction history there. Never click any link. If you spot anything unusual there, report it to PayPal.

Watch out for fishy emails in general

So many PayPal scams start with a phishing email. Again, always log into your PayPal account directly if you have any questions about it. To report a suspicious email or website that you come across, you can forward it to phishing@paypal.com.

More ways you can stay safer on PayPal

Add extra layers of security

Take extra precautions that make it difficult for others to access your PayPal app.

  • Lock your phone. Whether with a PIN or other form of protection, locking your phone prevents access to everything you keep on it, which is important in the case of loss or theft. Our own research found that only 58% of adults take the vital step of locking their phones. If you fall into the 42% who don’t, strongly consider changing that.
  • Use a strong, unique password for your account. That’s a password with at least 13 characters using a mix of cases, numbers, and symbols that you don’t use anywhere else. You can also have a password manager do that work for you across all your accounts.

Tighten your online financial security with the right tools

Online protection software like ours offers several additional layers of security when it comes to your safety and finances online. Web protection and scam protection can block suspicious links that might lead you to malware or a phishing scam — such as a fake PayPal link that will steal your login details. These solutions also include a password manager that creates and stores strong, unique passwords for each of your accounts, while locking down your online identity. Transaction Monitoring and Credit Monitoring are also able to recognize doubtful financial activity. In case you become a victim of identity theft, you could receive up to $2 million in ID theft coverage and restoration to help you recover quickly.