I have been scammed by Paypal too many times, however I still use them because I have no choice when it comes to ebay.
#1 I was scammed back in January 2002 for about $600 on an ebay auction. I didn't know I had 30 days to dispute it and since it was funded through my paypal account they told me there was nouthing I could do.
#2 I purchased a $600 commercial rack mount DISH receiver on ebay for $50. I paid the guy Via paypal, but I think the guy was pist that he didn't sell it for more and never shipped it. I disputed it and paypal recovered about $20. Never got the rest of it back because the guy never had any more money in his account.
#3 I sold a DVR 508 receiver to someone on ebay. The buyer tried to get me to file a false UPS claim stating that when he got the receiver there was a big hole in the box and all the cables and remote where missing. When I offered to simply replace the missing remote and cables he refused stating he would rather have the insurance money from UPS. I told him go ahead and file his claim, and as long as I didn't have to do any paperwork on my end I didn't care. Needless to say UPS told him I would need to do the paperwork on my end, and since I refused he wanted to return the receiver. I refused since this was going on 90 days.
He disputed the charges with his credit card company and paypal took the money from my account.
I did finally get the receiver back, but with no cables.
The guy lied to me because he said there was a big hole in the side of the box, however when I got the origional box back, there was no hole. He wanted me to file a false insurance claim so he could get $100.
#4 I bought one of those Tv B gone remotes on ebay for $40. They never shipped it, I won the dispute with paypal but never got a dime since the guy had closed his account!
My suggestion is when buying any big item with paypal is to always fund it with a credit card. If you don't get it, then dispute it with your credit card and let them f**k Paypal.
Let paypal worry about collecting their loss from the deadbeat seller because obviously they do not care for people like me who are honest!