PayPal customers encouraged by sellers to make payments via its ‘friends and family’ option instead of ‘goods and services’ are unnecessarily leaving themselves without payment protection – and some are even losing cash.
PayPal’s system allows users to select between making a payment for ‘goods or services’ – which comes with Buyer Protection should something go wrong – or ‘family and friends’ which is essentially a money transfer and does not offer protection.
In the last two weeks alone, we’ve spoken to several MoneySavers who have been encouraged by sellers to make payments using the ‘friends and family’ option – in some cases by online scammers.
We don’t know for certain why scammers do this, but we believe it’s because it’s harder for shoppers who’ve paid via ‘friends and family’ to get their money back. Legitimate traders can also benefit from being paid via ‘friends and family’ because those who are paid via it aren’t charged a fee, unlike with the ‘goods and services’ option.
However, the message on this is clear and simple: if someone selling you goods or a service asks you to send a friends and family payment, you should refuse. Otherwise you won’t be reimbursed if something goes wrong.
MoneySavingExpert.com 10 March 2020