so they call PayPal a scam
PayPal is a scam. Well, maybe not a scam but what they do is scammy. They have a user agreement that specifically prohibits the use of PayPal for payment for various types of transactions and digital currency is one of those types.
They are a private company and are perfectly entitled to have those restrictions.
What is scammy is to freeze your account and all funds within it (for 180 days) if they determine you've been trading for bitcoins.
Ironically, this was the cause of one of the first "flash crashes" to hit bitcoin. In October 2010, Mt. Gox was accepting deposits from PayPal. Then Owner Jed's personal PayPal account was frozen, which resulted in the suspension of that funding method and a subsequent crash of the exchange rate. Then another bitcoin seller, CoinCard, with permission from PayPal and a very customized and carefully monitored risk algorithm was operating until PayPal froze that party's PayPal account.
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http://www.bitcoinmoney.com/post/5086167006You'ld think with a 0% batting average, people would learn. But no, it has happened over and over. Some approaches tried by selling one and two dollars worth at a time. Bzzzzt. Thank you for playing, but no -- that was not the right answer either.
Not only that, those who bought bitcoins would find funds in their account frozen as well.
So basically, those who are able to get away with it are those who fly under the radar ... individuals doing a personal trade here and there.
Every other seller has had PayPal come down and come down hard.
Every. Single. Seller.
Now VirWoX has a different approach. They sell Second Life Lindens (SLLs) for PayPal, and then let you trade those SLLs for BTCs. That works fine.