What To Do If Your PayPal Account is Hacked

by Kevin on May 19, 2010

I woke up to a startling scenario on Sunday.

At some point in the middle of the night I had received a PayPal payment for $160 from someone I didn’t know. A few minutes after that a charge for $125 appeared on my account from an online gaming company. I read the e-mail alerts showing this account activity on my phone and ran to our home office to login to PayPal.

Strange, right? I was actually sitting on additional money ($35) that wasn’t mine. Very weird.

Just as this thought crossed my mind I refreshed the PayPal page. Poof! The $160 payment to me was put on hold/disputed, and my account balance showed a negative balance of $125.

Fantastic.

I’ve heard the stories of PayPal customer service. How people have gotten ripped off on eBay by selling items, shipping them, and then the buyer says they never received the item. PayPal was no help.

So if you’re sitting in my shoes, what do you do?

Four Steps to Take When Your PayPal Account is Hacked

All of this happened on Sunday morning and we had to get to church fairly quickly. (Ah, sleeping in comes back to bite me!) I checked my phone and reacted.

Step One: Panic

Like any normal person I panicked at first. I literally jumped out of bed and ran to the office computer.

I don’t think you can bypass this reaction. Maybe you wouldn’t worry — this is a mistake, this will get corrected, etc.

But with my fears of PayPal customer service I was nervous. Add in the fact that my credit card is attached to my PayPal account (and thus the possibility for hackers to spend my credit limit), and you’ve got one nervous personal finance blogger.

Step Two: Dispute the Charge Online

After you get over the panic, or perhaps in the midst of it, you need to act. I immediately found PayPal’s customer service phone number. I went through the automated phone tree only to discover that customer service did not sign in until 8AM Central time. (It was about 7:45 when I tried to call).

I continued my work online and began the process to dispute the charge to the gaming company. The $160 payment to me was already put on hold, so I figured someone at PayPal was already looking at that and I wouldn’t need to dispute it.

Disputing the charge is important because it starts the timeline where you started to fight the charge. The alternative would be for someone else (PayPal, the game company, etc.) to begin the dispute. The faster you dispute, in my opinion, the better.

Step Three: Contact Customer Service

I called customer service at 8:01AM. My dispute was already in the system. After navigating the phone tree again I finally spoke to a representative.

And let me tell you.

Those fears of poor customer service?

Completely blown away.

I ended up speaking to three different customer service / fraud / dispute representatives. All three were courteous, professional, and — here’s the kicker – they resolved my issue.

It was obvious my account had been utilized by someone other than myself. I knew that. But it was honestly refreshing to have someone who understood exactly what was going on when I called.

Step Four: Improve All Online Security/Passwords

This is critical. After you’ve dealt with (and hopefully resolved) the issue at hand you can’t forget to make changes to your online security.

That’s a completely different topic and one I won’t tackle today. Stay tuned via RSS or e-mail updates for a discussion of creating unique passwords in my next post.

{ 6 comments… read them below or add one }

Financialbondage.org May 20, 2010 at 9:52 am

Good info here. Mine has never been hacked, but it’s good to know they took care of the problem fast.

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Kevin May 20, 2010 at 7:48 pm

No kidding. Was definitely pleased.

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Forest May 21, 2010 at 1:49 am

:( That sucks…. I will be watching out for this and thanks for the tips.

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JP May 24, 2010 at 10:41 am

I’ve had to call PayPal twice. Once I was charged twice for an E-bay purchase, and once I had a password issue.

Both times the matter was resolved quickly and courteously.

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Kym October 7, 2010 at 12:53 pm

I once had my Paypal account hacked and $75 sent to someone from it. Paypal did nothing, they said my only hope was for the person who did it to feel bad and send it back. Oddly enough, that did happen, about 6 months later, but I don’t understand how Paypal’s stance was “we won’t help at all”.

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Kevin October 7, 2010 at 7:10 pm

Yea that is odd… I try to keep my PayPal balance as close to zero as possible. :)

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