Did you know that over 30 million small businesses use PayPal to collect online payments? While scamming does also occur on other payment platforms such as Zelle, Cash App, Venmo, Apple Pay and Google Pay, a recent study reported that 45% of scam reports are occurring on PayPal. PayPal is and will continue to be an attractive target for scammers because it has over 300 million users and that number is predicted to increase about 6% a year. PayPal scams typically involve strategies to get users to send money and personal information and/or to gain access to user accounts.
If your business is collecting payments via PayPal, there are steps you can take to avoid falling victim to PayPal scams.
- Contact PayPal from the number listed on its website. If you receive an email that appears to be from PayPal and gives you a phone number to call, this is a red flag. Don’t call the number in the email, only use the official PayPal phone number. Also keep in mind that official PayPal communications always address you by name.
- Use anti-virus software. This prevents some PayPal scammers from installing malware on your computer. Don’t download anything sent to you by email and make sure your antivirus software is up to date.
- Never click on text or email links and attachments. Instead log into your PayPal account directly. Some recent scams have used fake fraud alert text messages or fraudulent password reset emails.
- Only take or receive payment from verified buyers and sellers. Having a verified account requires sharing personal information with PayPal, which reduces the likelihood of a scam.
- Get the Ship to Address from the Transaction Details Page. You must do this to satisfy requirements for PayPal’s Seller Protection program.
- Use your own shipping method. This gives you control of the delivery and prevents a buyer from using bogus shipping labels or rerouting packages.
- Do not refund money outside of PayPal if the initial transaction was on Paypal. For example, if a customer “accidently” sends you more than the agreed amount but requests you send their refund to another payment platform, that new transaction will not be protected by Paypal, and often that second transaction is not reversible. Also be alert that this scam often uses a stolen account or employs a hacking technique that makes it appear as if money is in your bank account. The better option if a customer overpays is to cancel the transaction and start over.
Keep in mind that PayPal scams evolve over time, so you will need to stay informed about new scam strategies. In addition, it is also important to make sure your business is protected with adequate Cyber Coverage, so that if a malware attack occurs you can plan for expenses related to loss of business and/or data breach. Learn more about Cyber Coverage.
We would be happy to help you review your existing coverages or add Cyber Coverage to protect your business.
Resources
PropertyCasualty360: Avoid Falling Victim to a PayPal Scam https://www.paypal.com/re/webapps/mpp/paypal-safety-and-security https://www.aura.com/learn/paypal-scams#4.-Fake-PayPal-%E2%80%9CFraud-alert%E2%80% 9D-text-messages
