Paypal has been in the news lately for many reasons, including reports of increased phishing scams along with the announcement of settlement terms in a Paypal class action lawsuit (details about that below). Then there were the rather bizarre reports of a guy who'd reportedly sold stolen Victoria's secret bras on Ebay to buyers who had no idea the goods could be stolen.

Even as reports of phishing attempts continue - and Paypal users are a significant target for those phishing attempts - Ebay is requiring all sellers to move to paperless payments as noted on their updated site announcements here: pages.ebay.com/sell/August2008Update/Payments/. Paypal, of course, is a major option for paperless payments.

Huh? Does something seem....a bit screwy...about this picture? I have been a member of the Ebay community since 1998, buying and selling over 2000 times on the site, with a feedback rating of 100%. I think it is vital for anyone involved in online transactions to understand the realities of using sites like Payal, located here: www.paypal.com and often called Paypal.com during searches for the company. It is equally important to understand phishing risks, online scams and other identity threats involved in online business.

Paypal.com login problems, Paypal phishing and site issues

I've experienced a a fair share of Paypal login problems and phishing attempts and have been targeted numerous times by phishers attempting to get my Paypal information (and I'll bet many readers of this article have also been targeted, whether they know it or not). Some of these emails or other links look very official, putting people at increased risk. Most recently, Ebay had an announcement acknowledging that people trying to use Paypal on Sept. 4, 2008 were having checkout issues. That announcement can be seen here: www2.ebay.com/aw/announce.shtml and is one of many I've seen through the years. When buyers can't check out, my experience is that they can feel worried or suspicious towards both buyers and the site that has issues - sites like Ebay or Paypal.

Sometimes customers would email me and note that they'd tried to pay for an item several times through Paypal without success and ask if I'd take a check ofr money order instead. It wasn't uncommon for some to send actual cash, always a bit startling (and not something I'd have recommended) - but it did happen on occasion.

Now Ebay is requiring all sellers to move to paperless payments. Is that a good thing? I'm not so sure about that. Sure, checks can bounce and I suppose the dollars I got in the mail (again, not recommending for people to send payment that way) could have been counterfeit money. But I held checks till they cleared my bank and no money was ever noted as being counterfeit. Maybe I was lucky but checks didn't bounce and those dollars sent to me could be used immediately to buy whatever I wanted.

Targets of Paypal phishing scams and identity theft

It is extremely puzzling to me that Ebay would move to paperless statements - even as people who've studied online scams and fraud continue to warn about the risks. One of those people is an Indiana University professor who has actually noted that Ebay and Paypal are major targets for such scams, in a recent report for WTHR news here: www.wthr.com/Global/story.asp , an article containing info about the types of phishing attempts I've experienced myself.

I think there is plenty of risk for average users when it comes to Paypal and phishing threats. If a person clicks on a link in an email, they can be redirected to sites that steal their private information.....and I believe this risk is very real. With threats like that around, I have trouble understanding why Ebay would take away other options for payment, especially since not all consumers or Ebay customers - known as "buyers" on Ebay - are comfortable with Paypal. Many of my customers absolutely refused to use it. Many may refuse to use paperless payment methods. I have plenty of friends who still refuse to pay their bills online so why would they pay for other items that way? I doubt they will.

Thieves trying to target Paypal users in phishing schemes can get very tricky

There were weeks where I'd be forwarding many mails to Ebay or Paypal's special mail address so that someone at the company or a related security firm could check those potential Paypal or Ebay phishing mails, ones that often contained pages or links that looked exactly like ones found on Ebay or Paypal. Often, I'd be notified that the mail I'd just forwarded was indeed a phishing attempt.

But what if I'd been naive enough to click on the link? I could have been handing out my password and other private information that could have put me at risk for identity theft. When a Indiana University professor and doctoral students spend a semester studying online scams and find plenty of web pages and sites, including Ebay and Paypal, that are targets of phishing scams, the information about Ebay moving to paperless payments isn't exactly reassuring. In fact, I have to wonder if it is a wise business decision for Ebay, a site that has its share of controversy lately, including complaints about fee increases (although there are rumors that fees may be coming down again, day by day).

Oh, yes another email received in the wake of all this news? An offer to upgrade my Paypal account, noting that my account was closed until I completed the upgrade. It was a total scam, detected by forwarding that email to Paypal. It looked very official, however. Again, I can't help wondering how many fell for that one.

Paypal users and a class-action lawsuit

One recent mail I got, both by email and regular mail (sometimes nicknamed "snail mail" ) involved a class action lawsuit against Paypal. If you want to know more about the Paypal settlement, that information can be seen at the official website for the class-action settlement details, located at the Steele Settlement site here: www.steelesettlement.com/, with info about the millions of dollars awarded...