Yes, IF they want to. Obviously paypal doesn't want to eat the loss on this. The only time paypal guarantees refunds (that I know of) is for ebay transactions and that is only a recent development. When you deal outside of ebay paypal won't cover it. They are a business, and frankly don't care too much that a few people got screwed in these amounts. Paypal has only agreed to refund as much as his account will allow. I really don't expect them to do any more than that. Google paypal disputes and you'll find plenty of stories of people who won claims but got a fraction of the amount back because the seller's account was depleted. I'd like to think paypal is going to help us out but I doubt they'll do any more than they do for the rest of their customers.