Unfortunately this has been occurring more and more recently and Paypal has knowledge of it, yet they are not interested in combating it. It is almost like they are in on it because the excuses they give to deny the cases are RIDICULOUS! Mine was denied for the same reason despite the fact that I had proof from UPS that the tracking number was bogus (it was a stolen number). Paypal will NOT help you, I have escalated and tried to speak to someone and they will have you run in circles, there is no one to speak to live, and even if they reply they will give the standard answer that "it cannot be reversed" which obviously means they just won't, fraud or not. Claims department is a joke because they will not actually investigate fraud nor will they contact you to provide proof. They will give the seller time to come up with a fake tracking number and then close your case.
My suggestion is to make your experience known to A LOT of people. Personally, I am getting ready to close my paypal accounts for good.
