It is relevant info and I am sorry for the loss; if it is a BST person here please publish the details and name so we know who to look out for.
That said, it really should not be a surprise that a fee-free fund transfer does not contain the same protections as a purchase. We've had the discussion here multiple times about the propriety of using a gift or personal transfer to avoid paypal fees. Personally, I think it is inappropriate to do so. I throw in an extra 3% when people want paypal gift or friend stuff just to avoid the issue.
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