How Fraudsters Use PayPal

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Paypal logo printed onto paper.
PayPal is a popular service for online transactions, but has been and is still exploited by fraudsters. Here are some of the methods they use.

With the desire of young individuals having the need to get rich quick, many explore the dark web in a bid to get hackers that are capable of manipulating financial institutions such as banks and money transfer platforms.

A lot of guys end up learning more through colleagues who are considered to have “made it big” on the platforms by perpetuating the vice.

The primary mode of operation is the use of bitcoins due to its lack of regulation, thus enabling individuals to hide their funds through the crypto-currency.

So what happens is that the client will purchase a certain amount of bitcoin from a bitcoin exchange and then send the bitcoins to the vendors (hackers), who will proceed to send the client cash through their preferred platform.

For example, if you want to cash out an amount of about $600 USD via PayPal, you will simply get in touch with the vendor who offers the service.

You will then send them bitcoins worth about a quarter of the desired cash out amount.

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Depending on the modus operandi of the seller, they will then load your account with the said amount.

Although the process might look simple, it is not.

This is predominantly because the platforms used have experienced significant losses and in a bid to reduce it, they come up with very stringent measures that will lock out some people based on their name, identification numbers, billing address, or other identifying information.

To circumvent these measures, the affected parties do away with the account and acquire a new one under a different name and information.

It is crucial to note that the new names might be of non-existent people, noting that PayPal has no measures in place to verify the authenticity of new users.

In fact, this process can take just under five minutes.

golden bitcoin in a keybroad
You will then send them bitcoins worth about a quarter of the desired cash out amount.

When one makes a cash order and it arrives on PayPal, they will be given guidelines by the vendor on how to withdraw the cash as quick as possible, because the money will experience a chargeback in just a matter of time.

This brings into question how users can effectively dodge the platform.

As much as companies will try to ensure that the security of its users is high, data and processes will inevitably leak and drive the need to develop new methods.

In this field, there are individuals who work round-the-clock to figure out hitches in any given system that can be exploited.

In this case of PayPal, users tend to look for accounts with a “rich” transaction for the sole purpose of cashing out.

As has been seen in the past, they can even go to the extent of purchasing PayPal account from unsuspecting individuals for the sole purpose of cashing out an illegal money transfer, which will cause the user’s account to be adversely affected and possibly even blacklisted by PayPal.

After the occurrence of a chargeback, the PayPal account balance will become negative and without sorting the balance, the account then becomes limited.

This typically results in experiencing some ban from using PayPal, and the buyer of the account will have taken off with the money – leaving the original user in limbo.

Depending on the amount siphoned from the PayPal account, the account holder will have to facilitate payments of the funds to regain full access to the account.

For the very keen individuals, they end up trying to devise new ways to cheat the system.

After learning how chargebacks occur, one ends up having multiple PayPal accounts which they use to send money on their own and file chargebacks after a given period.

Therefore, if one has three PayPal accounts, they can make a chargeback of a given amount twice.

So for those who have been in the game for long and understood how the system works, they employ the use of anonymity tools to make sure their IP address is hidden and remain anonymous for quite some time.

In other cases, fraudsters use PayPal to get goods and services for free by sending the amount and filing a dispute after the delivery.

That explains why a majority of sellers emphasize the verification of PayPal accounts before any transaction.

Therefore, the vendors do undergo some inconveniences and, in the extreme, significant losses.
Some time back when criminals had just figured out how chargebacks occur, it was much easier to exploit the platform’s flaws.

So, after some time, the nature of each transaction to date is thoroughly reviewed by the buyer to the seller.

That said, it’s a plus for PayPal because more people are discouraged from making chargebacks due to the prospects and dynamics involved.

Mind you, the same person using two different accounts with two IP addresses can facilitate a chargeback as of now.

It is good news that PayPal has taken measures such as holding on to funds for a given time frame to verify the legitimacy of funds.

People have very few options, and even if they decide to undertake the vice, it will be more stressful because the chances of getting the funds are very minimal as the chargeback will occur before the release of the cash.

Previously, people made a substantial amount of cash from vendors in a small duration as there was little or no barriers to cashing-out.

In response, the system’s security was increased, and people who were in the business were forced to quit whereas those who had just joined suffered major setbacks and in other cases loses because they had sent bitcoins to vendors.

These occurrences have since declined in frequency, and who are in for quick riches explore other methods on the dark web such as credit cards or counterfeit items.

*Chargeback: Occurs when PayPal refunds is the owner funds after a transaction is disputed.



With the urge to know more about everything around us, I am an enthusiast researcher and writer with keen interest in expanding my knowledge in a bid to be well versed. Through writing, I express and share my feelings, ideas, and thoughts for like minded individuals.
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  1. Anonymous

    Paypal free $5000

    • Anonymous



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