Paypal Fraud Identity Theft

Hello:
Atty. Jofre here. Presuming this happened while you were using PayPal in the Philippines, what you are dealing with is not just a customer service issue, it already has legal implications, especially since your account was compromised without any password or email change and you are now facing a negative balance.
Let me walk you through this calmly and clearly.
Firstly, on the nature of the incident. If your PayPal account was accessed and used fraudulently despite no change in your password, email, or security credentials, this strongly points to unauthorized access, account takeover through backend exploitation, session hijacking, or misuse of linked payment instruments. Under Philippine law, this qualifies as online fraud and illegal access.
Secondly, on the criminal aspect. This may fall under Republic Act No. 10175, the Cybercrime Prevention Act. Specifically, this may involve a.) illegal access, b.) computer related fraud, and c.) identity misuse. Even if the perpetrator is unknown at this stage, a John Doe complaint can be filed. What matters is that your account was used without authority and you suffered financial damage.
Thirdly, on your liability to PayPal. A negative balance does not automatically mean you are legally liable. If the transactions were unauthorized, your obligation is suspended while the dispute is under investigation. PayPal has a duty to investigate fraud under its own User Agreement, and under general principles of obligations and contracts, you cannot be compelled to pay for transactions you did not authorize. The key here is documentation and timing.
Fourthly, on immediate steps you must take. a.) Report the incident immediately through PayPal’s Resolution Center and formally tag the transactions as unauthorized. b.) Secure all evidence, screenshots of the negative balance, transaction history, emails from PayPal, timestamps, and any alerts you received. c.) Check all linked cards and bank accounts and notify those institutions as well. d.) Change your password and enable two factor authentication, even if it appears unchanged, to show good faith and diligence.
Fifthly, on legal remedies you can pursue. If PayPal refuses to reverse the charges or insists that you pay despite clear signs of fraud, you may a.) file a formal demand letter disputing the balance, b.) lodge a cybercrime complaint with the NBI Cybercrime Division or PNP Anti Cybercrime Group, and c.) prepare a sworn affidavit to support a criminal complaint and possible civil action for damages if negligence or failure to protect your account can be shown.
Sixthly, on strategy and realism. Here is my candid take. Most cases like this are resolved at the dispute and escalation level if handled properly and quickly. The mistake many users make is treating it casually or emotionally. You need to approach this methodically and legally. The earlier the report, the stronger your position that you did not authorize the transactions.
I am the owner and Managing Partner of Recososa Law Firm, based in the Philippines, with offices in Luzon, Visayas, and Mindanao. We assist clients in cyber fraud, online financial disputes, and cybercrime complaints. We can help you draft the dispute narrative, prepare affidavits, and escalate the matter properly if PayPal becomes uncooperative. We can do this via Google Meet or Zoom, or through an in person consultation.
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Sincerely,