PayPal does not protect you - Paypal Users BEWARE

[joysofhealth]

I have an Airbnb unit and decided to use a Paypal account for payments to me to insure security. What a mistake!

I was contacted by Paypal to verify my account, which I did by verifying 2 small deposits. After that, I had deposits to my account from Airbnb. However, there was a withdrawal on 9/18/2018 of $.30. Then there was a withdrawal of $7.28 in October. Then there was a withdrawal of $200 on 10/1 and 2 withdrawals of $200 on 10/9/2018. All were from Paypal with Paypal Id's. 

I notified my banking institution and they put some restrictions on the account and I contacted Paypal on 10/10/2018. I was told by the customer service rep. that all would be taken care of and my $600+ would be returned to my account within 24-48 hours. An investigation would take place but that I had nothing to worry about. All funds would be restored.

I watched my account daily and nothing happened. I called Paypal again on 10/12/2018. Although there were some notes on my account, there were no notes as to an investigation or the return of any funds. The representative started over. This was infuriating. Nothing was done. My account was still vulnerable to hackers. 

As I was speaking to the customer service rep. I noticed an update on my account of a deposit of $1.24 on 10/12/2018 as I was speaking to Patrick, employee # 47975. The hackers were "testing" my account 5 days after I had reported the fraud. 

Here's the kicker: Paypal rep. Patrick employee # 47975 told me that he couldn't find anyone using my bank account number to withdraw funds from my account from within Paypal. He said that it must be from by debit card. (I have verified through my bank that it was an ACH transaction and not an ATM transacation). It was someone who had my account information and Paypal had all of that information. Paypal (i.e. Patrick #47975) said that they saw no transactions from my account to anyone who has a paypal account. In other words, they either don't acknowledge it, or they are oblivious to fraud. Either one is horrific. Paypal is not interested in your security but only in the fees they collect. I am cancelling my account immediately after this posting, I will post on social media, and I will engage an attorney to find out how to proceed against paypal. 

Beware. Cancel your account ASAP.

[fyiman]

It's been a while since you posted your issue/question and I hope you were able to resolve it. It would be helpful to others with similar problems if you post another reply with an update, especially if you successfully resolved this.

I agree with @nevadasmith.

In order to link your bank account to a PayPal account, you (or the "hacker") first have to enter the bank account details. Then, within a few days, PayPal will post a couple of small deposits, and an equal amount as a withdrawal(s), to the bank account. Once these transactions post to your account, you (or again, the hacker) has to log in to the PayPal account and verify (validate) ownership of the bank account by entering the amounts of these 2 small deposits.

If a hacker opened a new PayPal account, and added your bank account to their PayPal account, they would have to have access to your bank account to discover the correct amount of these 2 small deposits. If they were able to do this then they already have all they need to empty your account without involving PayPal.

Here is a more likely scenario:

This other person (I'll call them "Hacker"), opened a bank account at a bank, unrelated to PayPal, and unrelated to your bank account. For this bank account, they included "PayPal" in the account owner information. For example, if they named their company "PayPal Money Services", or anything similar.

They would have somehow had to get your bank account number, either by randomly choosing numbers until they found working numbers (hence the "testing" you saw), or by tricking you to give them your bank routing and account numbers (not your bank account login information), or by obtaining the information from a paper check that you sent to someone.

Then they would do withdrawals (ACH) from your bank account, directly into their bank account. When you look at your bank account transactions (online), you would see some fragment of their company name (including "PayPal...") in the transaction details. But, PayPal was not involved in these transactions at all.

The other issue, is that PayPal will not allow the same bank account (combination of bank routing and account numbers) to be used on 2 different PayPal accounts. So, if you already linked (and verified) your bank account with your PayPal account, the "Hacker's" attempt to link your bank account with THEIR PayPal account would have failed (PayPal would not have allowed the account to be linked).

This issue should have been resolved by disputing the transactions with your bank, which might require filing a formal written dispute. If your bank refuses to reverse the transactions then perhaps you can appeal their decision, or file a small claims case, or perhaps you'd have to use arbitration.

I'm not saying that PayPal is not capable of making mistakes, or that they are always able to recognize their mistakes, or that they always admit when they know they made a mistake, but in this case, given the information provided, it doesn't seem PayPal is at fault, or even really involved in the transactions at all.