We have been accepting PayPal for 10+ years. Recently we have noticed that PayPal's standards for authenticating users have really seemed to fall off of a cliff. For example a user placed an order on our website. When we get the order we know instantly that it is fraudulent. So we refund the payment in PayPal. When I am in paypal looking at the transaction it says that PayPal didn't even ask the user for an address. The user indicated to us that they were in Boston and they were actually in the Phillipines.
Is there any way to adjust our account settings to use basic logic to determine whether or not a transaction is fraudulent or an account is high risk?
Yes this has been a growing concern as well. So many hacked-into paypal accounts placing orders. Very little movement from paypal to stop it. Its their user accounts they need to protect. Touted as "the safe way to pay!"... but for merchants its definitely not the a safe way to accept payment.
Also in your comment, you mentioned you spot the fraud before sending product, and issue a refund. Well as of 2020, PayPal keeps the transaction fees on refunds and disputed transactions. So even if us merchants do the right thing, we still get charged for it.