You can't load funds to your PayPal balance with a debit card in the UK now.
The card provider will never know how the money was sent - here's why:
Look at any bank statement you have where you've used PayPal. If you fund your payment with any type of card that payment shows as a PayPal payment to whatever the recipients PayPal name or trading name is.
If you look at a payment funded by instant bank transfer (essentially a direct debit payment where the funds are released to the seller immediately, but don't come off your available bank balance until two to three days after the payment is sent), you'll see there's no recipient name - that's because with an IBT the funds are uploaded to your PayPal balance then used to ''cash'' the IBT you sent.
When it comes to disputing a debit card payment it couldn't be easier.
Find the payment in your bank account, make a note of the amount, date and recipient name.
Contact your bank and ask to be put through to the chargeback team (more likely to be referred to as the disputed payments team)
Once through to them ALL you have to say is :
''With reference to the payment made on (date) to (recipient) - I have not received the item I paid for. I have attempted to recover the money using PayPal's buyer protection policy but unfortunately they weren't able to help. I would like you to dispute this payment with PayPal on my behalf as the payment recipient has failed to supply me with the goods I paid for and is therefore in breach of contract''
The bank will send a form which is completed honestly - in other words, I sent this payment in return for (item name) - I never received the item. The card issuer will then credit the card holder's account.
Here's the non science part - PayPal don't defend chargebacks. They'll look at the request, put the funds on hold in the seller's PayPal account (creating a negative balance if needs be) and then, after a brief ''investigation'' will tell the seller that as the payment wasn't eligible for seller protection they'll need to upload the funds to their account to restore it to a zero balance. The seller will be given significant time to restore their balance, but won't be able to send payments until they do, and any payments they receive will go towards reaching a zero balance. If the account remains in a negative balance it will be limited, then restricted, then locked. At the point it is locked it becomes a debt collection issue, PayPal using pit bulls in England and Wales to recover debts.
The important thing to remember if faced with this situation now - choosing to negate your PayPal buyer protection by sending a specific type of payment does NOT mean you have negated your legal rights.
There is no need to tell the bank why your buyer protection claim failed - they don't care so there isn't any reason to say you sent the money via friends and family.
The distinction here is PayPal's - they are aware that people help sellers evade fees by using friends and family. They take the view that the fees the seller pays are essentially the premium the buyer pays for their ''insurance policy''
It's like paying insurance on a 1.8, failing to declare you've swapped in a V8 then expecting the insurance company to still payout when some Johnny No Friends wipes you out whilst uninsured and drunk.
You can't claim from your insurer but you sure as heck can sue Johnny No Friends.
Dishonest sellers rely on people giving up when PayPal deny their claim - that's why they choose the friends and family option in the first place.
