Ben Castellano was stunned to find $1,180 in unauthorized charges on his PayPal account. Even though he had no idea who made the transfers, PayPal refused to reverse the transactions, claiming the “Sending to a friend” feature used by the scammers wasn’t protected under its terms of service. Adding insult to injury, PayPal told Castellano he should use a different payment method “next time,” despite the fact he never sent the money in the first place.

Castellano’s frustrating ordeal shines a light on the often confusing and opaque inner workings of PayPal’s dispute resolution system. How does a user successfully dispute a fraudulent charge? What are your options when an initial appeal is denied, and what kind of explanation does PayPal owe its customers? Read on to learn how these unauthorized charges happened—and what you can do if you ever find your own account compromised.Ben Castellano was stunned to find $1,180 in unauthorized charges on his PayPal account. Even though he had no idea who made the transfers, PayPal initially refused to reverse the transactions. The company claimed the “Sending to a friend” feature used by the scammers wasn’t covered by its Purchase Protection under its terms of service. Adding insult to injury, PayPal told Castellano he should use a different payment method “next time,” despite the fact he never authorized the money transfers in the first place.

Castellano’s frustrating ordeal shines a light on the often confusing and opaque inner workings of PayPal’s dispute resolution system. How does a user successfully dispute a fraudulent charge? What are your options when an initial appeal is denied, and what kind of explanation does PayPal owe its customers? Read on to learn how these unauthorized charges happened—and what steps you can take if you ever find your own account compromised.