IANAL, but I don't think small claims court against PayPal would be end in a judgment against them. Though they might just cave and give you the money to avoid dealing with it.
It seems to me that PayPal's responsibility ended when they delivered the check to the correct recipient, and that's what they paid for with the $1.50 fee.
But that didn't happen, so it's PayPal who's been defrauded and separately from that they still owe the funds to the account holder.
But IANAL also. Being USPS there are probably special laws about it.
But that didn't happen, so it's PayPal who's been defrauded and separately from that they still owe the funds to the account holder.
But IANAL also. Being USPS there are probably special laws about it.