Banks Respond to Wave of Fraud in PayPal Transactions

A massive security leak at Paypal has led to billion-dollar blockades in German payment transactions: A large-scale fraud attempt related to Paypal has serious consequences for payment transactions in Germany. Apparently, millions of customer data were stolen and subsequently used for unauthorized transactions. Several German banks responded with drastic measures and temporarily put all Paypal payments on hold.

Suspicious Payments in the Millions

As reported by the "Süddeutsche Zeitung" and BR24, unusually high payment orders from Paypal were forwarded to banks en masse in recent days. Individual transactions reportedly amounted to sums between several thousand and hundreds of thousands of euros. These unusual occurrences triggered internal security mechanisms at numerous institutions.

Security Problem at Paypal as the Trigger

The incident was apparently preceded by a widespread data leak: Around 15 million email addresses along with passwords from Paypal accounts appeared on the darknet. Whether these data were actually used for the fraudulent transactions has not yet been conclusively clarified. However, it is certain that Paypal internally struggled with a failure of its security system – a circumstance that exacerbated the problem.

Ten Billion Euros Blocked

According to the Savings Banks and Giro Association, payment volumes amounting to around ten billion euros have been temporarily blocked across Europe. How long the affected banks will take to manually check the accumulated transactions is currently unknown. The payment transactions between PayPal and the banks have been restored, but the backlog remains a challenge.

Criticism of the Company's Communication

Numerous customers reported unclear messages from PayPal in recent days. Automated messages often stated that the respective bank account was not covered—without any indication of technical problems with the payment service provider itself. Instead of clarification, there was a note about possible additional fees for a renewed collection attempt.

What Affected Customers Can Do Now

Consumer advocates advise PayPal customers to check their account statements particularly carefully in the coming weeks. Transactions that have been made unlawfully can be reversed within eight weeks. This reversal is part of the SEPA direct debit procedure and should be initiated immediately in case of irregularities.

This article has been automatically translated, read the original article here.