My petition on the 10 Downing Street Petitions web site has just been approved, so please sign it!
http://petitions.pm.gov.uk/3partyccs/
Currently, you are not protected by your credit card company when paying for stuff with a credit card using PayPal, which basically means when buying anything with credit card on eBay too.
The problem is that by using PayPal, it ends up being two separate transactions. First, you send the money from your credit card to PayPal which is one transaction. Then PayPal send the money to the seller, which is a separate transaction. As banks are only required by the banking code to investigate transactions you participate in, if there is a problem with the item or seller they won’t help.
The petition asks for this loophole to be closed, so that banks are forced to properly deal with PayPal issues. Since PayPal themselves basically make it impossible to resolve anything properly through their own system, I think it’s important that you can ask your bank for assistance or to do a chargeback.