Protection from Fraud when Using PayPal Friends & Family

I made a payment via PayPal Friends & Family the other day using my PayPal balance + Santander balance, and it was unfortunately a scam since the seller disappeared on me. I know it’s pretty common to get fleeced through F&F but I’ve successfully avoided it until today. Blah blah blah unsafe don’t take the risk aside, obviously PayPal doesn’t offer buyer protection but I’ve called up Santander and they said you could do file a direct debit indemnity form or something like that, which I’ve done. The amount is peanuts, just £15 (£4 through Santander) but it’s still annoying.

I was wondering if Monzo offers any sort of protection/ way to raise a claim with PayPal like this? I understand if you use a credit card you get protected/ refunded asap but this isn’t the case with a debit card unless it was an unauthorised transaction, so I was wondering if they do things like direct debit indemnity on here too.

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This is a difficult one to answer without knowing the specific situation but I’m guessing that it’s MasterCard’s chargeback protection that applies here too.

Here’s a roundup of the key bits of information that we have about that. You might be able to find the answer to your question in one of these posts?

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In this case I’m not sure Monzo will be able to do anything - it’s not even a debit vs credit card issue - it’s comparable to you withdrawing cash and giving it to someone else in person. As far as the card provider is concerned the transaction is not fraudulent (you knowingly gave PayPal the money), and PayPal honoured its part of the contract as they clearly disclosed there is no buyer protection and it’s basically like withdrawing cash and giving it to the other person.

Just curious - why did you choose to do it like this instead of sending them the money like a proper Paypal or wire transfer/faster payment? Personally when buying things online from an individual I always ask for wire transfer and if they aren’t shady they usually accept, while scammers run right away.

On Depop it’s pretty common to ask for PayPal F&F since depop charges an extra 10% on top of PayPal 3% (more people are now using Mecari to avoid this) Scams are pretty commonplace on there but I’ve avoided it so far till this week. Bank transfers are regarded as inconvenient and you don’t really want to go through all the fuss to add a payee but obviously convenience/ lower price comes at a risk

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Just to note on to this, if PayPal has taken the money via means of your bank (via direct debit) then you will be eligible to claim via an indemnity claim using Monzo. As far as I’m aware ALL banks that participate in the direct debit scheme must offer this option as a requirement (obviously this would not be available until current account launch).

If the payment comes out via card however, it would then have to follow the Mastercard regulations on transaction disputes.

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That makes sense, thanks for clarifying the distinction!

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