How do scams work on PayPal?
PayPal scams typically involve getting victims to use the Friends and Family option (which has no buyer protection) rather than Goods and Services, or to act on fake payment notification emails that mimic PayPal's branding.
Last reviewed: 10 June 2026
Explanation
PayPal is one of the safer online payment platforms because its Goods and Services feature offers a formal dispute and refund process. Scammers therefore go to great lengths to prevent victims from using that protection — most commonly by insisting on Friends and Family transfers, which are instantaneous and non-reversible.
Phishing emails that convincingly spoof PayPal notifications are a separate major threat. These emails claim your account has been limited, a large payment is pending, or that you need to verify your details. The links inside lead to convincing fake PayPal pages that harvest your login credentials or payment information. Checking the actual sender email address usually reveals a non-paypal.com domain.
Invoice scams are increasingly common: fraudsters use real PayPal accounts to send official-looking invoices for products or subscriptions you never ordered, sometimes with a phone number to call if you want to dispute the charge. Calling that number connects you to the scammer, who walks you through a "refund process" that actually authorises a payment to them.
Advanced fee fraud also flows through PayPal: a seller on an auction site claims they cannot accept a normal payment and that their PayPal needs a "business verification" payment from you before releasing the item. No legitimate PayPal workflow requires a buyer to send extra funds for verification.
Common red flags
- Seller insists on Friends and Family payment rather than Goods and Services
- Email about your PayPal account comes from a domain other than @paypal.com
- Invoice arrives via PayPal for a product or service you never purchased
- PayPal notification email contains urgent language and a link — check actual sender address
- Buyer claims they sent more than the asking price and asks you to refund the difference via Zelle
- Any claim that PayPal requires an extra payment for verification or to release funds
- Phone number inside a PayPal notification email — official PayPal emails do not include support phone numbers
What to do now
- Log into PayPal directly by typing paypal.com rather than clicking links in emails
- Always request Goods and Services when paying a stranger for a product or service — never Friends and Family
- Open unexpected invoices directly in your PayPal account, not through email links; mark fraudulent ones as spam
- Enable two-factor authentication on your PayPal account
- Report phishing emails by forwarding them to [email protected]
- If you were defrauded, file a dispute through PayPal Resolution Center and contact your bank
Frequently asked questions
What is the difference between PayPal Friends and Family and Goods and Services?
Friends and Family is designed for personal payments between trusted contacts with no fees and no buyer protection. Goods and Services charges a small fee to the seller but gives the buyer the right to dispute and request a refund if the item is not received or not as described.
If I receive a fraudulent PayPal invoice, will I be charged automatically?
No. Receiving an invoice in PayPal does not charge you automatically; you must click Pay. Mark the invoice as spam within PayPal and do not call any phone numbers listed on it.