yes if say u sold me a 200 dollar item via regular post, i can say u send me a bag of rocks and file for a claim. the second i file the claim, 200 dollars will be frozen in ur account. the dispute will then 100% go my way and 200 dollars will be back in my account + i received ur item.
with regards to internet fraud, identity theft etc. theres a risk in anything, but i dont think u need to worry here. if ur worried, once u make the purchase immediately deattach ur credit card from your paypal account.
as ur the buyer, and in no way am i insisting but for anyone that reads this post use it as an informative guide on the mechanism of paypal but dont be a poo, i got frauded a couple of times, both as a buyer and a seller. and its not nice.