Introduction

I spend a lot of time in PayPal community forums helping people with their PayPal questions.  In the passed few weeks, I have seen lots of posts related to a particular PayPal scam that fraudsters are using to trick sellers into shipping products even though they never made a payment.

In this article I am going to discuss the details of the procedures the scammers are using with details about how and why it works.

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PayPal Pending Payments for Shipment Tracking

PayPal, along with most all payment processors, has procedures in place to help avoid fraud and protect buyers.

There will be times when you are selling online that a payment you receive will be held in a pending status.  PayPal will request that you enter a tracking number to verify that you have indeed shipped the product before they will release the funds to your account.

Sometimes the funds will be released as soon as the tracking shows the item is on its way.  Other times you will have to wait until the tracking shows delivered before the cash will be cleared to your account.

This is completely legitimate, and many payment processors follow similar procedures.

How Do PayPal Scammers Take Advantage of This?

Unfortunately, PayPal scam artists have been using this procedure to trick sellers into shipping merchandise that they have not paid for.  Here’s how it works.

Initial Contact

The PayPal fraudster will reach out to you directly via email or some sort of a direct chat system.  They will talk with you for a while about your product(s) to build your trust, so that you will feel comfortable with them as a buyer.

At some point they will tell you they would like to buy your product, and that they are sending you a PayPal payment directly.  They will ask you to check your email inbox for a PayPal notification that they have sent the payment.

Fake / Spoof PayPal Email

The fraudster will then send you a fake email that looks like it came from PayPal.  This email will include PayPal branding, and will be formatted very similar to other PayPal transaction emails you may have received previously.

If you look closely, you will often find grammar mistakes and other signs that the email is a fake.  In most cases it will come to your SPAM folder, and the fraudster will typically make it a point to ask you to make sure to check your SPAM for the notification.

This email will explain that you have a received a payment that is being held in a pending status.  It will also include a link to a page where you can enter your tracking information.  Once again, this is completely fake, but will be built to look and feel like an actual PayPal page.

Their goal is to make you feel comfortable about this process.  If you have seen this process with a legitimate payment before,  you may be quick to assume this is just another instance of the same thing.  This is exactly what they are hoping for.

How Do I Avoid This PayPal Scam?

The easiest way to avoid such scams is to NEVER click links from emails like this, and NEVER trust them.

If you ever receive such an email, close it, and open a separate web browser yourself.  Go directly to www.paypal.com and log in to your account.

From there, check your Activity Log.  If you have received a transaction of any kind, regardless of the payment status, it WILL show up here.

If you do see a transaction here, click into the details of it.  This is where you would see any details about requirement for shipment tracking, and this is where you would click a link to enter such information.

If you do not see a matching transaction in your Activity Log, then you did NOT receive a payment!  Do not let the fraudster trick you into thinking you cannot see it simply because it is pending.  This is exactly how they trick people!

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How to Report PayPal Scams?

Once you have verified that this is indeed a scammer, it’s help to report this to PayPal.

I typically ignore the scammer from this point on, but feel free to troll them a little bit if you have fun doing that sort of thing.  🙂

If we all educate ourselves a little bit on how to avoid such PayPal scams, and we report instances that we find, hopefully we can help keep others from running into this problem.