I'd like to share a little story regarding PayPal Friends & Family that I think will be helpful.
Most Pinsiders probably know that PayPal does not want to help people who are conned into sending a scammer funds via F&F. They naturally want their 2.5% cut of the transaction, or whatever it is, so you shouldn't expect much protection from them if you left them out of the deal.
I had $5500 stolen from me by a scammer on Mr. Pinball Classified. I was trying to buy an AC/DC Premium. The scammer gave me a sales reference (that was clearly his buddy in on the scam), wrote up a purchase agreement document (using a fake name) and even contracted a shipping company to pick the machine up at the supposed address. I sent him the funds via PayPal F&F and learned a valuable lesson when the machine was not at the address. Don't ever use PayPal F&F!
However...if you find yourself in this situation, opening a dispute with PayPal will not be enough. Even though PayPal harbors the criminal's banking info, shipping address, etc...you're still out of luck and the authorities don't really seem to care for the most part. You will have to open a fraud dispute with your bank.
I filed a dispute with my bank and within two days, PayPal completely reversed all of the transactions. The key is, PayPal will need to see the phrase "unauthorized" transaction. To PayPal, this will mean you got hacked and someone else sent the funds from your account. My bank told PayPal the charges were unauthorized and now I have my money back and the scammer is out the cost of shipping. Gotcha MF!