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I don't know about anyone else, but I certainly knew it. I never keep any money in my PayPal account - if I buy something with PayPal, it comes out of my bank account.
PayPal UK are a bank, by the way, regulated (as are all other British banks) by the Bank of England and the Financial Services Authority. That means that, for people in the UK, if a fraudulent transaction occurs, your money is fully protected.
The more important question to ask, in your case, is how somebody else obtained your logon credentials.
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