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The emails in question state that the recipient's account has been 'limited' as a result of a policy violation and they are then prompted to update their account by clicking on a link in the email.
The links take victims to legitimate-looking websites that are designed to steal PayPal login details, as well as personal and financial information.
On 20 July alone, Action Fraud - the UK's national reporting centre for fraud and cybercrime - received more than 1,000 reports about the scam.
Pauline Smith, Head of Action Fraud, said: "Phishing is a gateway to fraud. These emails are commonly used by criminals to gain access to your personal and banking details, which they then use to steal your identity or your money.
"It is common for criminals to spoof the legitimate phone number or email address of a trusted organisation, to trick us into providing information.
"If you receive a message out of the blue that seems suspicious, take five minutes to check directly with the organisation or brand contacting you that the communication is genuine. If something feels wrong then always question it."
Official organisations, such as your bank, won't ask for personal or financial information by text or email. If you do receive an email you're not sure about, you should check with the relevant organisation directly that it is legitimate and avoid clicking any links in the email until you know it is safe.
SCAM WARNING:warning:: We have received over 1,000 reports in 24 hours about these fake PayPal emails.
Here's what you should look out for and what you should do if you receive one: https://t.co/xN8R2qwtDw pic.twitter.com/qpwcQw4CNF
- Action Fraud (@actionfrauduk) July 28, 2020
You can also forward it on to the Suspicious Email Reporting Service at [email protected]
A PayPal spokesperson said: "At PayPal we go to great lengths to protect our customers in the UK, but there are still a few simple precautions we should all take to avoid falling victim to scams.
"Be aware of any emails or text messages that ask you to provide personal information directly in response. Scammers often use a false sense of urgency to prompt you to act on a phishing email.
"All communications from PayPal to account holders would be sent to the secure message centre within their PayPal account. You will have a secure message waiting if PayPal does need you to take any action.
"A genuine PayPal email will only ever address you by your full name - anything that starts differently should immediately raise your suspicions. Look out for spelling mistakes, which are a common tell-tale sign of a fraudulent message. If you have any concerns regarding an email you have received, you should send it to [email protected]"
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