Proof Paypal Supports Fraud


So, on 1/3/12, someone logged into my paypal account from washington state (I live in PA) and sent themselves a payment of $279.99 for some kind of web service. I immediately called Paypal when I received the email notification to inform them that this was not an authorized transaction. The only thing Paypal did was open a "dispute" with the identified receiver, whos response was to refund the money. Paypal then closed the dispute, and placed a HOLD ON THE REFUND for 3-5 days! I called an asked why no investigation was made for the fraud, since obviously whomever was going to receive the money had to have a paypal account and contact information. How are they allowed to just press the "refund" button and go about their criminal way? Paypal claims they have no liability to investigate the fraud if the person issued me a refund! My bank thankfully credited the money back into my checking account the following day, but I stil have to wait for the money to be available in my paypal account and bring it to my bank to pay them back. Meanwhile, the fraud person had about 10 other trasnactions set to go through my checking account had I not caught the first one! Where is the liability on paypal's behalf?

**NEW** Horror Stories