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They will if you the buyer reports the payment itself as fraudulent ("someone stole my card" etc), rather than anything the seller did.
grams-
corrected now to show goods and services. obviously can see PayPal getting his money back, can't see for the life of me why they'd take it from me however or worst case eventually give it back to me as I've done everything by the book. I cannot for the life of me see how a 'genuine' fraudster could benefit from stealing someones PayPal details unless they 'got in' and changed the registered address - given that the person first asked me to send to a different address (more believable scam) unless a highly intuitive double bluff and by coincidence the occupants of the address/scammer having the same surname as the person who's details have been pinched i'd suggest it's unlikely. I can't see any way in which this could be a genuine dispute - can anyone else?
Edit - maybe their kid had bought something using their details - fine, send it back then!
Pasty_Spumante
I thought PayPal didn't refund friends and family payments?