Rental Listing Scams via PayPal Friends and Family
How fake landlords collect security deposits and first month's rent through PayPal Friends and Family — the one PayPal option with no buyer protection — and why legitimate landlords never use it.
Part of: Rental Listing Scams
Last reviewed: 1 June 2026
PayPal Friends and Family is explicitly designed for personal payments between people who know each other. It has no transaction fee for the sender, which makes it superficially attractive for private transactions — and precisely this appeal is exploited by rental scammers who frame a PayPal F&F request as a convenient, fee-saving option. What the victim does not know is that by choosing Friends and Family over Goods and Services, they have waived the one protective mechanism PayPal offers for disputed transactions.
This guide covers how rental fraud leverages PayPal's F&F option to collect deposits with no recourse, the landlord scripts that normalise the request, and the verification steps that protect prospective tenants before any money changes hands.
How this scam works on PayPal F&F
Rental scam listings appear on major platforms — Zillow, Craigslist, Facebook Marketplace, SpareRoom — at prices slightly below market rate with appealing photos. The 'landlord' is unavailable to show the property in person, citing relocation, work travel, or health reasons, but offers to arrange a key handover after the deposit is paid.
When a prospective tenant expresses interest, the landlord requests a security deposit and first month's rent via PayPal Friends and Family, framing it as simpler and fee-free for both parties. Some scammers send a small F&F payment to the tenant first — a 'good faith gesture' — to demonstrate that PayPal is being used and to create reciprocal trust.
PayPal's Purchase Protection explicitly excludes Friends and Family payments: the policy states these are for personal payments to known contacts, not commercial transactions. When the tenant files a dispute after the landlord disappears, PayPal declines to intervene under Purchase Protection. The tenant's only avenue is to request a refund voluntarily from the fraudulent 'landlord,' who will not comply.
Legitimate landlords and letting agents do not request security deposits via PayPal F&F. In most jurisdictions, tenancy deposits are required to be held in a government-approved deposit protection scheme — not collected via a peer-to-peer payment.
Common red flags
- A landlord who requests a PayPal Friends and Family payment for a security deposit or rent
- Rental price noticeably below comparable properties in the area
- Landlord unavailable to show the property in person, citing travel or relocation
- Urgency framing: other interested tenants will take the property if you do not pay today
- Landlord who communicates only through email or messaging apps and cannot provide verifiable local contact details
- Listing photos that appear in reverse-image searches under different addresses or landlord names
How to protect yourself
- Never pay a rental deposit via PayPal Friends and Family — this option has no buyer protection for commercial transactions
- Physically visit the property and verify the landlord has keys and legal authority to let it before any payment
- In the UK, legitimate landlords must use a government-approved tenancy deposit protection scheme — ask which scheme will be used
- Verify property ownership through public land registry or assessor records before transferring any deposit
- If using PayPal for any rental-related payment, use Goods and Services to preserve dispute rights — though meeting in person first is strongly preferable
How to report it
- Report to the FTC at reportfraud.ftc.gov (US), Action Fraud (UK), or your national fraud authority
- Report the rental listing on the platform where it appeared
- Report to PayPal via their Support Centre — while F&F reversal is not guaranteed, the report creates a record
- File a local police report if a significant sum was lost — documentation supports any further action
Frequently asked questions
Does PayPal's Purchase Protection cover a rental deposit paid via Friends and Family?
No. PayPal explicitly excludes Friends and Family payments from Purchase Protection. These payments are treated as personal transfers between known contacts. If the recipient does not voluntarily refund the payment, PayPal has no mechanism to force a refund under this payment type. Goods and Services payments carry dispute rights that F&F does not.
Why would a legitimate landlord ever use PayPal Friends and Family for a deposit?
A legitimate landlord would not use PayPal F&F for a tenancy deposit. In the UK, tenancy deposits must be protected in a government-approved scheme. In other jurisdictions, there are standard bank transfer or cheque methods for deposits that create paper trails and protections. PayPal F&F is a scam signal specifically because it removes the protections that standard deposit methods provide.