I too have suffered at the hands of Paypal. So called the safest way to pay for eBay items is great. However, it's only safe if Paypal and eBay can assure a person that their systems are 120% safe which, due to my own experiences, is completely untrue.
A little over a year ago, following recommendations from Paypal and also eBay, I decided to create a Paypal account, so that buyers from overseas could bid and pay for the items I had listed. Everything was fine to begin with and then one day, completely out of the blue, eBay emailed me to let me know that somebody had attempted to use my details in a view to create an account of their own.
It was then I started to panic. The hacker had managed to get into my eBay and Paypal accounts, changed all of the passwords and, on requesting a balance for the credit car my Paypal account was linked to, the hacker seemed to have gone on a small spending spree, using my credit card details to buy mp3s and the like from Malaysia. Fortunately, my bank managed to cancel the relevant credit card the same day eBay had got in touch with me., although I've never managed to claim the £50.00 + cash, which was standing in the account, ready to transfer without incurring a fee.
After reporting all this to Paypal, they were as much use as a chocolate teapot. They wouldn't respond to my emails, even when I emailed them on several occasions requesting that they get in touch to help me sort out my problem. I even wrote overseas to them, enclosing the scant details I'd managed to come up with myself. Just over a year on, I'm still sat here awaiting their response, which I doubt will ever happen during my lifetime.
eBay were slightly better, at least answering my emails. However, I had to end up creating a brand new email address, a brand new eBay account, a brand new Paypal account, and opened a special account at my local bank, which purely deals with the things I buy myself, and any eBay payments from buyers also go into that new account.
If you have many items you need to sell, I would suggest that you:
Firstly, set up a basic current account with your bank or building society - which means that your personal account(s) are as protected as they can possibly be.
Set up eBay and Paypal accounts - don't use the same password for both. I change my passwords at least once a week now and would recommend doing the same to other eBay buyers and sellers.
If you have money to transfer into your newly created account, for safety purposes, I send money to my account quite often. Even though Paypal charge you 25p for the privilege, I'd rather have them take that, than some horrible hacker be able to steal the cash at in the account. Again, depending on what sort of balance I have, I try to withdraw the cash from my Paypal account either every day or every other day, regardless of the sum to be transferred.
I've had my new account for just over a year now and the advice I give you in this review appears to be working really well for me.
Good luck with any new ventures and I hope none of you fall foul of the evil hackers.