Sorry to tell you but if your funding source was a credit card or bank account. PayPal won't help you. One of my Microsoft Live accounts was hacked. I caught the fraudulent transactions within 6 hours of submission (happened in the middle of the night my local time). I called Microsoft who told me it wasn't their problem. MS views hacked accounts as a "user problem" unless MS is aware of a broader general hack targeting multiple accounts. MS policy is it is the customer's responsiblity to properly secure their account. Since the same account was hacked 2 weeks prior, MS would not reimburse me since they only authorize their MS support teams to reimburse a customer once a month (at that is if you are lucky). I also called PayPal to stop the payment transactions and they refused to stop them because PayPal was not the funding source (I stupidly had my bank account tied to my MS live account for payments). My bank did stop the payments but PayPal paid Microsoft, debited my PayPal acocunt preventing me from using it and forced me to pay them to continue using their crap service so I lost the money anyway (only $63). A PayPal support person suggested I submit a fraud claim in but told me to expect it to declined since the payment source wasn't PayPal's internal account and was my bank account instead. PayPal declined my fraud claim because MS said it was legit transactions (ignoring my previous calls reporting the fraud).
In my first MS account hack, the first incident I called MS about oddly started by a hacker calling MS pretending to be me. They were on the phone with MS ordering console bundles, multiple xbox live cards, and a bunch of games I already owned. MS apparently caught too far into the call they weren't me and cancelled the multiple of thousands of dollar order and MS never told me anything (no emails and no calls). Magically, the next day the hacker was able to connect to my MS Live account with their Xbox 360 and ordered additional content which I caught quickly since I owned all the titles already. I called MS, they walked me through taking my account back over. In the middle of helping me, the MS engineer found a ticket where the hacker called the day prior and tried ordering direct with MS but I only knew of the contents of that message because the MS engineer was mumbling to themselves while they read it. The MS engineer told me he wasn't allowed to tell me anything other than someone called trying to order from MS and MS stopped them. Since all my problems started with the hacker's called to MS, I believe MS was socially engineered and the MS person too late into the call that it wasn't me . MS **bleep** me again, though, when the MS engineer didn't have me hit the button to forget previously trusted devices. That is very important because adding two factor authentication doesn't impact Xbox 360's so the hacker's Xbox 360 automatically conntected using my account even after I chnaged the password. So two week's later, I again had 3 smaller transactions for games I already owned.
The second time I called MS, they wouldn't help me at all. I was able to use my previous MS support ticket to get an engineer to help me. The MS engineer found the Xbox 360 device and he could see if wasn't even my half of the country. But, he still couldn't help get me reimbursed because MS's reimbursement policy literally greys out the buttons so the engineers can't file for reimbursements (or so they told me).
I highly suggest you seriously reconsider how and when you use PayPal. Although I've been a PayPal member since 1998, this one incident was scarey enough to cause me to revamp my online payment practices across all media. I also suggest using Visa gift cards or similar as your pay source for MS. The US legal system is very far behind the current state of online crime and company's like Microsoft and PayPal are pushing the hacking cost directly onto their customers by removing their accountability for hacked customers. I no longer buy game titles directly from MS at all and buy from GameStop or other sources where I don't have to have pay using my MS live account. Good luck and I hope you have a happier ending than me.
