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Iowa PayPal Scam Prompts Security Fears

This news story was published on November 8, 2018.
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Recent news about an Iowa woman who fell victim to a PayPal scam, in which she was fleeced of $400 dollars, has prompted a fresh round of statements from officials urging customers to exercise caution when using digital payment platforms. The scam occurred in October 2018, when the woman in question tried to chase up an eBay refund and attempted to call PayPal customer service in response.

Although she reportedly used a number claiming to be PayPal on a Google search page, the number she actually called belonged to scammers pretending to represent one of the world’s largest payment platforms. The scammers managed to extract crucial account information from the victim and were able to extract hundreds of dollars of her own money before she realized what was going on. Crucially, one of the most alarming aspects of the scam is that the perpetrators already had enough knowledge about the victim’s account information to make themselves appear legitimate.

Scams targeting services like PayPal account for the majority of the $190 billion that is stolen via credit card fraud every year, according to the financial magazine Forbes. This means that is is more important than ever that users exercise caution when using PayPal, and know how to spot a legitimate transaction from a fraudulent one.

New Platforms Require a New Security Approach

Since launching as an independent service in 2015, PayPal’s stratospheric rise has seen it garner over 200 million active accounts in 202 countries as of 2018. The platform represented a completely new, easier way of paying for goods and services, as well as sending money, meaning that new kinds of scams have proliferated which differ from common banking and credit card scams.

According to the digital technology magazine MakeTechEasier, the most common types of Paypal scam in 2018 are those that take advantage of the operating system to fool users into parting with money. For example, sellers using Paypal are often deceived by false “money received” emails which look like authentic PayPal emails and are sent without any money actually being given to the seller.

Similarly, a common tactic is to use authentic-looking PayPal “notifications” which state there is an issue with your account, and that you’ll need to provide your bank details to a certain email address to resolve it. These all mirror the now-famous Iowa scam in that the scammers pour resources into trying to resemble the actual PayPal platform as closely as possible, to trick unsuspecting users.

Using PayPal Responsibly

The PayPal security team and leading cybersecurity experts urge users to be more vigilant than ever when dealing with PayPal. The platform in itself is highly secure, so the trick is making sure you know that you’re actually dealing with PayPal at all times. No matter what goods or services you’re buying or selling, always go through a legitimate, recognized company that uses PayPal, rather than unknown individuals.For example, if you’re looking to buy your groceries or do some online shopping, your first port of call should be globally recognized names such as Amazon or eBay, both of which use the PayPal to accept payments, and have lower security issues than other sellers. If you’re paying for services such as subscriptions or food deliveries online, use a site which has a known-relationship with PayPal, such as taxi and food delivery provider Uber or Seamless.

The same applies if you’re dealing with income or cash winnings that can be paid out via PayPal, or deposits or bills that users are expected to pay to websites. You want well-known, trusted platforms with plenty of positive reviews. For example, online casinos like Betway use PayPal as a deposit and withdrawal method for security. If you’re earning money online through a digital service such as online surveys, use a PayPal-approved one such as Swagbucks. If you’re wanting to pay for subscriptions via PayPal, you should only do so with a highly-established vendor such as the music streaming giant Spotify. Safety is always highest in numbers.

Lessons for the Future

What we do know for sure is that the number of PayPal scams in existence will only go up, not down. This is why experts such as McAfee recommend always keeping a lookout for new scams and new ways to defend yourself. With a little bit of savvy, you’ll be able to continue using PayPal without fear of theft.

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