Here's why you shouldn't choose the 'family and friends' option when using PayPal

Consumers are being pressured to purchase goods and services through PayPal's 'family and friends' option - but it's putting them at risk.

Thousands of online shoppers use PayPal every day to purchase goods and services online from websites like clothes marketplace, Depop.

However, according to MoneySavingExpert, many shoppers are being encouraged by online sellers to opt for PayPal's 'family and friends' option when making a payment. Choosing this option leaves consumers without payment protection, and has resulted in some shoppers losing cash.

Buyer Protection

On PayPal's system, consumers can choose between making a payment for 'goods and services' or 'family and friends'. The former comes with Buyer Protection in case something goes wrong, but the latter is essentially just a money transfer, without protection.

This means that if something goes wrong in a transaction where you've opted for a family and friends payment, you won't be reimbursed. Consumers who choose this option would therefore be more susceptible to scams.

Legitimate traders can also benefit from the family and friends option as they aren't charged a fee for the transaction, unlike with the 'goods and services' option.

When should I make 'family and friends' payments?

The advice is that if a seller is pressuring you to choose the family and friends option, you should refuse. If they are a legitimate seller, chances are they'll be fine with using the goods and services option.

If you do encounter a problem with a goods and services transaction, you should be protected under PayPal's Buyer Protection. This means you can get all your money back from an order if it doesn't arrive or match the original description - including delivery costs.

To do this, you'll have to log into PayPal and click on "Dispute a transaction" under "Report a problem". PayPal will then facilitate contact between you and the seller to try and work out the problem.

If you're still not happy after this, you can click on your existing dispute and choose "File a claim" to escalate your dispute into a claim.