Hmmm strange u didnt escalate it further, allowing someone to keep their money AND your item is FRAUD, take it higher if PP doesn' cover you....but they should, they're obligated to by LAW.

I've used EB+PP for aaaaages, and had mishaps, people change their minds, claims etc etc and in every case i got my $$ back, they got their $$ back....maybe i know how to use it properly 

Perhaps the older PP mishandled things b4 Ebay bought them? but it shure as f**k works for me and everyone i trade with. 
Many of my work collegues and their partners spend a lot of time wheeling & dealing, all their claims work too.
MM.