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All the comments here are depressingly familiar as I've had the identical experience.
I was under the impression that Paypal offered a copper-bottomed payment solution that meant they were there for us in disputes of this type. On the basis of my experience I will not be using PayPal again nor will i be recommending them as a payment solution.
Apparently PayPal is completely unwilling to shut down scam artists like this, so we should find other payment services who will support their customers. The PayPal resolution center is automated, and there's no way to get satisfaction. Caveat emptor.
This needs to be escalated to Daniel Schulman CEO of Paypal / <removed>
Perhaps he needs to know how his company is being ran, providing unsupported protection to his customers and allowing these phony chinese companies to rip us off!
Paypal removed the email address posted for Daniel. WTF is going on with this company?? Protect your customers!!
They are protecting their customers, but on the seller's side, 4.9% of transactions are always nice. I reported the website of these scammers for a week indicating that they are using the Paypal circuit to make scams and according to the regulation they should be barred to use it but the website still has the possibility to use Paypal.