Scammers exploit payment loophole on PayPal

Concert-goers are being warned to avoid paying for tickets via PayPal using the ‘friends and family’ function, as these transactions are not covered by the financial service’s buyer protection policy. 

The warning comes as Consumer Protection has received numerous complaints from Western Australians unable to retrieve their money after using this function to transfer funds to scammers posing as genuine ticket sellers on classified sites.

Most PayPal transactions are covered by a buyer protection policy, whereby consumers are entitled to receive refunds if goods are not received or differ greatly to the item’s description.

However, payments made through the ‘friends and family’ function do not charge the seller any fees and are ineligible for this protection, meaning the funds cannot be retrieved if a problems occurs.  Instead consumers should always ensure they use the ‘goods and services’ PayPal payment option when buying from people they don’t know as this is covered by buyer protections.

Commissioner for Consumer Protection Lanie Chopping said people should be careful when buying tickets to sold-out events and only choose a method that is buyer-protected.

 “Ticket are often purchased only days ahead of an event taking place and scammers are telling consumers the payment will occur faster if they go through this function, which is untrue” Ms Chopping said. 

“We have long been advocates for payments to be made through PayPal as it has protections in place, however consumers need to be aware that there are some exceptions to this policy. 

“The PayPal ‘friends and family’ feature is designed for using with people that you trust, so if someone you don’t know is selling you something and requests or demands that you use the ‘friends and family’ feature, do not purchase the item.

“The only truly safe way to get a ticket to an event is to buy direct from the authorised primary seller, as you may encounter further difficulties if you buy from ticket re-sellers on classified sites.”