> Illegal? Probably, but I'm not a lawyer. I imagine the words "unfair competition" might be present somewhere on the legal paperwork

I was thinking more along the lines of “child pornography is a crime, and making a knowingly false report of a crime is a crime”.

I know it is a crime (in many jurisdictions) to make a knowingly false report of a crime to law enforcement; but PayPal aren’t law enforcement. I don’t think that should matter though - if it isn’t already a crime to make a knowingly false report of a crime to a business, then it should be