This is SOP (standard operating procedure) in banking.
It is just that with paypal making it so easy to be a seller, more people are noticing.

Look into credit cards. Credit cards are scammed, spoofed, stolen, swiped... all the time. And the person who pays for it? The retailer. Lets say you had a motorcycle dealership, and someone came in with a stolen CC and fake ID. Everything looks legit, but when it is found out, there will be a charge-back and fine. So, the retailer, who thought everything was good, is now out a motorcycle, and the money, and more money.

You see all the time about credit card and credit report protection programs. These are just bots working on a database. If the banks wanted your account to be protected, they would implement these bots themselves. If banks really wanted to protect your account, they would call and verify your person before doing anything like send a new card to a new address.

However, banks make more money on defaults then they do on loans.
You see, they make the money up out of thin air, so losing it isn't a big deal. What they need is continued cash flow. And people paying late fees, and other fees, keeps the money flowing in, while the created money stays the same. (If you pay off your CC, the money disappears; they hate that)

Everyone pays an estimated 10-15% extra for everything because banks are lazy.