I won an auction on eBay for a digital camera less than a year ago and paid the guy through PayPal. The next thing I know - he was no longer an eBay member - and the same through PayPal.
Now, PayPal guarantees payment if the person has a verified address. Well, his address was 'verified' when I sent the funds, but after I realized that I just got butt-fucked, his address status on PayPal became 'unverified' - I didn't get a penny from either place.
I paid $870 for a digital camera I never received. I have a feeling that someone, somewhere, got screwed - and I think that person was me.
I've never heard of all this happening to someone before, but I guess you live and learn.
PayPal is still one of the biggest and best sites that do what they do, but it isn't perfect. eBay on the other hand - I'm sure that people get beefed there on a daily basis.
Pat