I've been reading this with interest as I buy most of my guns used, mainly by distance purchases.
Regardless of the method of payment, the seller would have probably scammed a buyer whatever.
I see no particular safety in paying by bank transfer either, as it has similar risks.
Banks are most unhelpful. You transfer money, job done in their mind.
Every now and again someone gets shafted and its a real shame. The law seems to be able to do little and the buyer frequently gets no recompense.
Other than buying from known members on here (and even that can be risky at times as you never know anyone's financial position), if buying from freeads or other less controlled forums, I'll often ask for a pic of the seller's driving license. Not foolproof but a little extra insurance.
I do use paypal but never refer to what I'm buying. If I know the seller, I may use the F&F, if not I buy as purchase and pay the extra for the fees. If goods do not arrive, I would approach paypal and just state goods never arrived. I'd hope that would generate a refund. If paypal asked what I'd bought it certainly wouldn't be anything referring to guns.
I'm aware in the op's case, the seller had linked his paypal to freeads and thats the way the buyer paid. I've never paid that way and never will.
I'd tackle the freeads thing with plod as a seperate entity after getting a refund (or not).
I reckon there's more chance of a refund this way than by using bank transfer.
Its another eye opening reminder of the dangers of doing deals at distance.
Hope things work out.