EBay to cut fraud risk, but only for PayPal payments

To help prevent fears of online fraud among buyers and sellers alike, Internet auctioneer eBay plans to abandon its previous limits on transaction protection beginning this fall.

The upcoming changes apply only to payments made through PayPal, however, as opposed to checks, direct credit card payments, and other forms of payment used by some buyers and sellers on eBay.

Right now, people buying goods through eBay via PayPal are only protected for up to $2,000 per transaction if the purchased item never arrives, or if it varies significantly from the seller's description. Sellers, on the other hand, are currently protected for only $5,000 annually against claims, charge-backs, and reversals from eBay buyers.

But in one of a series of moves made by new Chief Executive John Donahoe -- who replaced Meg Whitman on March 31 -- eBay will lift all caps on PayPal buyer and seller protection after the end of this summer.