Sorry, but PayPal has not done wrong here. Credit cards and PayPal accounts get stolen, that's not unusual and simply not 100% preventable.<p>PayPal/eBay offers, essentially, free insurance against fraud through the Seller Protection Policy. To take advantage of this insurance, you have to ship to the buyer's confirmed address. Whoever took over the account and spent someone else's money can't easily change that address without the real owner or PayPal noticing.<p>PayPal is completely unambiguous about how this works. It's in the receipts, it's on the thank-you pages, it's in the policy descriptions, it's in the FAQ's, etc. Here's a screenshot of a PayPal receipt for a received payment, if you haven't seen one recently. It's brightly highlighted right up top what you should do to stay within the protection of the free insurance.<p><a href="http://i.imgur.com/QhrBm.png" rel="nofollow">http://i.imgur.com/QhrBm.png</a><p>The OP got scammed. PayPal got scammed too. They don't have the stolen funds he was paid with. If the payment was funded by credit card, PayPal not only doesn't have the money but also paid a chargeback fee on it. They're actually willing to use their own money on top of that to pay for the stolen items if the seller shipped them to the PayPal account's address -- great! But the OP didn't, so he's in the same place he'd be if he were paid with a bad check or directly with a stolen credit card -- all he can do is take the scammer to court, if he's ever found.<p>Re the final line: "I urge PayPal to do the right thing and correct this issue immediately, lest I be driven to seek legal options to recover what I believe is legally owed to me." The party that owes him money is the person that placed the bid on eBay, not the means by which he made a fraudulent payment. When someone pays a store with a bad check, it's not the bank that's sued, it's the check writer.