In a nutshell the Paypal/Western Union scam is an old one and uses people who do not have a PayPal account already.
They send you a fake website location which looks like the money has gone into your account.
On a secondary note, I got a phishing email from a hacked friends hotmail account and as a result they gained access to my PayPal account. Withdrew $300.00 and tried to get more.
Paypal was great and refunded the money and blocked the attempted transactions.
