Topic: How to avoid BTC related scam/fraud when selling thru PayPal (Read 219 times)

Transact with a reputable person only. You have to check their trust rate, review and feedback. It's hard to trust people even in those platforms because there are still lots of scammers there. If you're doubting to transact in Paxful and Local Bitcoins then look for a better platform outside Paypal. I haven't been using Paypal for a long time because they are always putting funds in dispute.

Never send first, that is the first and foremost.

If you could provide proofs that you are a legit seller, never agree to anybody who will buy bitcoin to you that you are going to send them first, they are going to say excuses like, they could be trusted and many other bluffs, but don't listen on them, move on to other buyers who are willing to send first. Don't regret losing buyers like that, or you'll regret transacting with those kind of buyers in the end.

I have bad experience with Paxful although it was mostly my fault so I don't want to blame Paxful. I'm just saying there are many scammers there, so if the offer looks too good to be true, it most probably is.

I sold BTC to someone (he has a ton of negative feedback now, so no need to mention the name) who offered PayPal payment in EUR at 1.5 times the real price. He sent payments from random PayPal accounts (yes, plural). My mistake is that I didn't demand that he sends photo of his ID card and I didn't request that he sends payment from his personal PayPal account. After 5 days I started to receive emails from PayPal that transactions are reversed (chargeback), I provided detailed explanation and screenshots but PayPal didn't even try to investigate the case, they simply ruled in buyer's favour and returned the money. I even went to the police station but they told me they can't do anything because all parties involved (Paxdul, PayPal, buyer) are foreign so they can't demand personal information or anything unless I sue them. It wasn't a small amount but lawyer would likely cost me even more and there is a chance that the case would never get resolved, in case they used fake identities for example.

TL;DR
On Paxful trade only with very trusted users (50 positive feedbacks is not enough to trust the user, he could farm that feedback quickly) AND demand that he send you a photo of his ID card AND tell him that you will accept only payment from his personal PayPal account. One option, probably the safest, is that you tell the buyer you will only accept PayPal payment if it will be sent as "Family and Friends payment", because there is no chargeback option with this payment method. Make these things clear before starting a trade.

I think is possible if you should try avoid trading via paypal but if trade with paypal you should search a trusted person and older to avoid chargebacks and lose money, but always make sure you talk with person who pretend to be, and on lbc some accounts are bought so better avoid.

I also don't like PayPal and don't use it anymore, because transactions can still be withdrawn through a dispute, even though it's good for reducing money laundering.
for bitcoin paypal transactions, find a reputable seller, can check the profile or transaction history, I am sure he will not destroy his reputation or file a dispute, even so be careful.

Localbitcoins accounts may be bought, so I wouldn't trust that much even the history.
I've used only established exchanges until now (but I withdrew to bank or Revolut), but if this is not possible, as a second option, I'd go with the users vouched by @OmegaStarScream

Paypal and Cryptocurrency don't go well, I will never transact from other party using Paypal, only if it is very trusted Paypal people are banning people who uses their system to transact Cryptocurrency, they are against it, and of course, you are not safe from chargeback, they can always file a dispute within 60 to 180 days after the transaction, so it is not recommended to use Paypal.

Always check the users feedback on both websites. Paxful actually holds the funds in an escrow account until the trade goes through. I have actually seen this prevent a scam one time in the past. Money was sent and a few hours later, Bitcoins weren't received, so a ticket was opened and the funds were taken out of escrow and put into the Paxful BTC wallet. Localbitcoins is a little different though. You have to find someone higher rated on there to trade with. If you trade with a guy that has done 1,000 trades and hasn't scammed anyone, then your chances of getting scammed are pretty slim.

Stick with reputable ones.Problem solved. Not all are scammers though but its really hard to trust up into a user which you do see had few feedbacks
and as a human being you would simply choose which ones do have the most positive reviews rather than on few ones.
Prices might differ but its worth than to risk into those non popular ones.

On local bitcoin, you have to make sure that whoever you are trying to contact for exchange has a very good reputation, and also you have to consider the history of the person first to see how much transaction has been done. You know that any public place where you are meeting different people with different promises, you don’t know their heart and their skill, but if you judge based on an experience of the person, you could get it right.

I have been using local bitcoin for a very long time, now, but before I purchase or send money to anyone, I check the number of confirmed trades that the person has had, if the confirmed trade is much, then I will have that assurance that the person i am dealing with is the right person and not just wasting my time.

You're also able to set a minimum number of trades for members to trade with you on Paxful last time I checked, so this should at least help filter out a few of the more obvious new scammer accounts. You're also able to cancel trades at any time as a seller if you find certain things about a member to be suspicious, such as only transacting with one or two people to boost their successful trade number and maybe being inactive for an extended period of time before transacting with you.

Some sellers on Paxful also ask for ID to weed out scammers. As a buy I'd rather not have to send my personal information to a random person on the internet in exchange for anything, but if you're trying to filter people hard this is one way you can do it.

What I did, I asked the various buyers to verify their PayPal associated email (by replying from that email) and
send me the payment from the same name and email address (which they have  at their PayPal account) and
most of the buyers left the trade.

I would rather say avoid Paxful. Either use this forum of use localbitcoins while doing your transactions. On the forum you can obviously look at the person's trust level while similarly on local bitcoins too you have number of confirmed trades and feedback score of every trader before you trade with anyone. Try searching for someone with a very high feedback score 95% is generally pretty safe because 5% reviewing are themselves the scammers. However in such a situation the person accepting the offer will be sending first so you will still be at a risk of transaction reversal over paypal but most of the routine traders are pretty concerned regarding their reputation so they won't take this big of a risk.

Sorry, I didn't understand how I can use my second PayPal account as middleman?

As said above (and the same thing applies to Paxful), you should check the trust history of anyone you're going to deal with. Just make sure that the feedbacks are new as people buy/sell LBC/Paxful accounts all the time so you could be dealing with someone's that is not the original owner of the account.

As for chargebacks, you can't really protect yourself from them unless you have a second PayPal account (empty) which you could use as a middleman.

An alternative (a better one in my opinion) would be to trade with members on Bitcointalk. I can vouch for: Shasan and Magnavox (they have PayPal on a regular basis).

Thanks for the reply. I'm a newbie on Paxful and localbitcoins, and nobody is trading with me
because I don't have any feedback. Only got few transactions and most of them were from
scammers, which were using other people's PayPal accounts.

Traded tons of times in Localbitcoins and the only thing I can say is that always go for the most trusted, most reviewed and most accountable profile in the platform. I’m not saying that the rest of the traders are there to scam you but oftentimes those who are on the top of the platform are the ones who developed their names over time and are afraid to lose it just for a few hundred bucks.

It's pretty simple. Not sure about Paxful, but with LocalBitcoins, you simply transact with people that are fairly reputable(or greatly reputable if you're transacting huge amounts). Important statistics and information like trade volume and number of confirmed trades are publicly available on LocalBitcoins user's profiles so there's that. You might not get the best prices with these trusted people, but it's better than risking trading with people with little to no trades.

What is the best way to avoid fraud from a hacker/scammer, when selling BTC on Paxful or localbitcoins
thru PayPal?