We had one of these a few weeks back. But only $7.99 in our case. PayPal charged us a fee of $15 for the "privelege". Even tho it was nothing to do with us. Same thing "unauthorised use".

The funds are still frozen after 3-weeks now.

However, we contacted the buyer and they responded saying it was all a big "s***f-up" and they refunded us by direct bank deposit including the $15 fee.

So no matter how long PayPal take now or what their decision is we are all good.

So I do hope yours can work out something like this.

But from what I read here you have done all the right things and have very good evidence. So I can't see how they can find against you in this case. Bottom line is tho neither banks nor PayPal will lose. They will pass it all onto the seller in whatever way they can. I guess if they can recover it from the buyer you might get your funds released.

Seems the response "we are fighting it on your behalf" is standard words. And are pretty hollow. We got that too.