PayPal customers should get stronger scam protection, says Which?

PayPal customers should be covered by the same consumer protections as when they make other forms of payment, Which? is urging.

While PayPal has its own buyer protection policy to safeguard customers against goods which never arrive or are fake, faulty or not as expected, users do not have the same protections offered by other financial products, the consumer group said.

PayPal is not part of the voluntary code which reimburses victims of authorised push payment (APP) scams.

Many banks have signed up to the code, which commits them to reimbursing blameless customers who have been tricked into transferring money.

Which? said it has heard from some PayPal users that they have struggled to get their money back.

One customer told Which? their PayPal account was taken over by scammers who embarked on an eBay spending spree.

Some £1,619 worth of smartphones were sent to the United States before the customer was able to get his bank to block his accounts.

Which? said the hackers had changed the email address associated with the PayPal account and he was locked out.

Which? said PayPal agreed to refund £800.

However, Which? said PayPal told it that it has now refunded the customer £1,574.50 and he has been able to access his account again.

PayPal told Which? the customer had made several claims of unauthorised payments but it was unable to find any evidence of unauthorised access to the PayPal account for one of the claims made.

PayPal also said it had placed restrictions on the account at one point “as a precaution because of the suspected unauthorised account access”.

Another PayPal customer told Which? he had problems when he tried to get reimbursed after paying £800 when attempting to book a holiday home.

After sending the money, the hosts disappeared and the customer realised he had been scammed.

Which? said PayPal told it that it would not refund him under its buyer protection as he authorised payment using the “friend or family member” option.

But Which? said if he had paid directly from his bank account, he could have got his money back through the banking industry’s voluntary APP code.

The consumer group believes the bank transfer scams code should be made mandatory for all banking institutions – including payment platforms such as PayPal.

Harry Rose, editor of Which? Magazine, said: “Consumers should feel confident that their money is protected however they choose to make a payment.”