Thankfully the law, doesn't have the same stick up it's ass that you have...
Terms and conditions have to be 'reasonable' and so try and pretend you're a new customer...have a look at paypal's site and try to see what they will and won't cover before you sign up.
I can't see any exclusions...and that would be your due diligence.
Therefore you might conclude that paypal does offer you the safety they are selling.
Burying the information in some hidden page after you've signed up is not reasonable and would form the basis of the claim.
Stupid is also not thinking for yourself and repeatng everyone else's mistakes