$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
PayPal friends and family payment trick scam
A seller or scammer insists on receiving payment through PayPal's Friends and Family option, which has no buyer protection — if the product never arrives, there is no way to file a dispute or get a refund.
“online shopping scam”
↑ 184%Key indicators
Usually targetsOnline shoppers
Often hitsSmall business owners
Common regionUnited States
Last updated2026-04-04
Estimated impact
$120
median reported loss
Typical range$24 – $1.2K
Recovery rate~40%
Annual reports370,000
Scam breakdown
1
The scammer lists an item for sale on a marketplace, social media, or forum and directs the buyer to pay via PayPal Friends and Family.
2
Since Friends and Family transactions are treated as personal gifts, PayPal's Purchase Protection does not apply.
3
After receiving payment, the scammer blocks the buyer and never ships the product — the buyer has no recourse through PayPal.
What to do first
Always use PayPal's Goods and Services option for any purchase — the small fee provides full buyer protection.
Related terms
PayPal F&F scampersonal payment scamno buyer protection PayPal scamOnline shopping scamsPayPalSurgingOnline shoppersMarketplace buyersYoung adultsSmall business ownersCreators and online sellersEducators and studentsUnited StatesCanadaUnited KingdomPayPal F&F scampersonal payment scam
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Ahmed, 34, a online shoppers, encountered what appeared to be a legitimate online shopping scams situation while using PayPal. The scammer lists an item for sale on a marketplace, social media, or forum and directs the buyer to pay via PayPal Friends and Family.
Step 2
What happened next was calculated: Since Friends and Family transactions are treated as personal gifts, PayPal's Purchase Protection does not apply.
Step 3
The pressure escalated quickly: After receiving payment, the scammer blocks the buyer and never ships the product — the buyer has no recourse through PayPal.
The outcome
Ahmed realized something was wrong when a seller specifically asks you to send money as 'friends and family' instead of 'goods and services'. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Always use PayPal's Goods and Services option for any purchase — the small fee provides full buyer protection. Ahmed's experience shows why a seller specifically asks you to send money as 'friends and family' instead of 'goods and services' and they claim it avoids fees and offer a small discount as incentive are the clearest early warning signs.
How to identify it
- A seller specifically asks you to send money as 'Friends and Family' instead of 'Goods and Services'
- They claim it avoids fees and offer a small discount as incentive
- The transaction is for a marketplace purchase, not a personal transfer to someone you know
- Pause before paying, clicking, or sharing information. Scammers rely on speed.
- Verify the sender, company, or agency using a phone number or website you already know is legitimate.
- Treat secrecy, urgency, and off-platform payment requests as strong scam signals.
What to do now
- ✓Always use PayPal's Goods and Services option for any purchase — the small fee provides full buyer protection.
- ✓If a seller insists on Friends and Family payment, walk away — legitimate sellers accept standard payment methods.
- ✓Report the scammer to both PayPal and the marketplace where the listing appeared.
What to save before reporting
- ✓Save the message, profile, phone number, email, or URL that was used.
- ✓Keep payment confirmations, receipts, and account alerts before you dispute or delete anything.
- ✓Write down the timeline while the details are still fresh.
How big is this problem
You are not alone — this scam affects millions of people.
These numbers come from government agencies and official reports. If you have been affected, know that this is a widespread problem — not something that only happens to careless people.
FTC 2024 fraud losses
Imposters
Most common FTC fraud category in 2024
FTC says imposter scams remained the most commonly reported fraud category in 2024.
History and evolution
- This scam family tends to persist because the social-engineering pressure works even when the exact scripts, platforms, and payment methods change.
- The specific packaging evolves over time, but the core pattern usually stays the same: create urgency, control the channel, and push action before verification.
- PayPal's own user agreement states that Friends and Family payments are not eligible for Purchase Protection and should not be used for commercial transactions.
Recovery and follow-up
- ✓Save the messages, receipts, account alerts, and transaction details before you block or delete anything.
- ✓Report the scam through the official platform or government channel that best matches where it happened.
- ✓Always use PayPal's Goods and Services option for any purchase — the small fee provides full buyer protection.
- ✓If a seller insists on Friends and Family payment, walk away — legitimate sellers accept standard payment methods.
- ✓Report the scammer to both PayPal and the marketplace where the listing appeared.
Why this pattern keeps working
Even when the story changes, most scams still use the same pressure pattern: urgency, authority, and a request to move money or data fast.
PayPal's own user agreement states that Friends and Family payments are not eligible for Purchase Protection and should not be used for commercial transactions.
OpenScam research
Where to report it
If you have been targeted by this scam, reporting it helps authorities track the pattern and protect others. United States has dedicated agencies that handle fraud reports.
ReportFraud.gov
Federal Trade Commission
Central U.S. consumer fraud reporting portal.
File an IC3 complaint
FBI Internet Crime Complaint Center
FBI portal for internet-enabled crime reports.
Start identity theft recovery
IdentityTheft.gov
Official U.S. identity theft recovery plan builder.
Explore further
Understand the bigger picture
Who is most at risk
Who this scam targets
Primary targets
Online shoppers, Marketplace buyers, Young adults
Geographic concentration
United States, Canada, United Kingdom, Australia
Primary channel
PayPal — Online shopping scams
Why this group is vulnerable
Online shoppers are particularly vulnerable because this scam exploits trust in familiar brands, authority figures, and time-sensitive decisions. The rapid increase in reports suggests that awareness among this demographic remains low.
Sources and methodology
How we verify this information
OpenScam tracks scam patterns using a combination of government consumer protection databases (FTC, IC3, Action Fraud), platform-specific fraud reports, and verified consumer complaint data. Each entry is cross-referenced against at least two independent sources before publication.
Severity ratings are based on financial impact potential, reversibility of damage, and volume of reports across multiple reporting channels. Trend velocity reflects the rate of change in report volume over the most recent 90-day window.
This page was last verified on 2026-04-04. Red flags, recovery steps, and reporting resources are reviewed quarterly against current agency guidance.
Evidence and indicators
- PayPal's own user agreement states that Friends and Family payments are not eligible for Purchase Protection and should not be used for commercial transactions.
Source notes
- OpenScam research
Frequently asked questions
Common questions about paypal friends and family payment trick scam
How does the paypal friends and family payment trick scam work?+
The scammer lists an item for sale on a marketplace, social media, or forum and directs the buyer to pay via PayPal Friends and Family. Since Friends and Family transactions are treated as personal gifts, PayPal's Purchase Protection does not apply. After receiving payment, the scammer blocks the buyer and never ships the product — the buyer has no recourse through PayPal.
What are the warning signs of paypal friends and family payment trick scam?+
A seller specifically asks you to send money as 'Friends and Family' instead of 'Goods and Services' They claim it avoids fees and offer a small discount as incentive The transaction is for a marketplace purchase, not a personal transfer to someone you know
What should I do if I encounter paypal friends and family payment trick scam?+
Always use PayPal's Goods and Services option for any purchase — the small fee provides full buyer protection. If a seller insists on Friends and Family payment, walk away — legitimate sellers accept standard payment methods. Report the scammer to both PayPal and the marketplace where the listing appeared.
Who is most at risk for paypal friends and family payment trick scam?+
This scam primarily targets Online shoppers, Marketplace buyers, Young adults. It is most commonly reported in United States, Canada, United Kingdom, Australia and typically appears on PayPal.
Is paypal friends and family payment trick scam getting worse?+
PayPal friends and family payment trick scam is currently surging — reports are increasing rapidly. It has been reported across US, CA, UK, AU. Last updated 2026-04-04.
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Help someone avoid this scam.
Scammers succeed because people do not talk about it. If you or someone you know has been affected, there is no shame in it — it happens to millions of people every year. Share this page with friends and family so they know what to look for.