If you must deal with paypal
Have more than one bank account. Use one account as a gateway to paypal/ebay, but immediately transfer most funds to a different account to keep their greedy mitts off of it.
If you are selling on ebay, you don't need paypal if you have your own merchant account.
They do this to avoid anti-trust issues or possibly visa/mastercard requires it of them
When you purchase things via paypal, make sure you have taken any payments you have received out of
your "credits" and transferred it to your bank account and then to your safe bank account otherwise they
will use that first. Then make sure the credit card option is selected each and every freaking time or they
will attempt to take from your bank account. They do this because money taken from your account comes
to them essentially free while money from your credit card forces them to pass on the 2.3% they charge
every time regardless of pay source. This is where they make their largest profit!
You use the credit card option to protect YOU. Paypal has zero incentive to work on your behalf regardless
of the glaring level of fraud. If they can't get the money from you, they at least put on a show, but still rarely
appear to actually act. After a while they will, with crocodile tears, say they are sorry but you need to pay.
At which point I suggest you tell them to pound sand unless you have no options other than ebay to sell.
Me? Well, I made the mistake of taking a payment through paypal for a friend.
She did web work for someone and their was a dispute. The buyer contacted paypal and asked for
their money back. Since the TOS states that services are not covered by the buyer protection program
paypal ruled in my friend's favor. However, shortly before a year had passed the buyer told here credit
card company that it was an unauthorized charge and paypal attempted to take the money from my
paypal account (I did not have a bank account linked and nothing in the credits at the time) so they were
not able to get it. They froze my account.
Having spoken to them, they said they would "fight" for me, etc. etc.
So, despite having emails from the buyer complaining about the purchase, and thus proof that it was
indeed authorized, paypal managed to lose the dispute. (Or that is the story they told me, I think it was BS).
So, they asked me for the money and I told them that the buyer was ripping THEM off and not ME.
I figured that if they had an actual risk of loss, they might actually make an effort.
Well, they passed on my "debt" to a collector who demanded the money.
I asked for proof of debt, there was none, and threatened to sue them if they put anything on my
credit report. They went away, but I still can't sell on Ebay and the only purchase I make are
when the seller is local and I can meet and pay cash.