I may be in a similar situation. If I close the bank account right after transferring the funds out, will that render paypal unable from retrieving funds from it?
Paypal will look for any possible way to get the money from you if you owe them money. And then they will lie about it if u go to the bank complaining, they will say you allowed them to take money from you. They will
You close the bank account so paypal cannot take money from you after the account goes down.
I wouldn't recommend reporting a card lost or stolen. If you do this frequently, it can lower your credit score. And your bank will only allow this to happen to many times before they decide you're a risky customer, and give you the boot.
Ask your bank for a new account number, make PayPal look like the bad guy (because they are).
That's what I did and my bank issued me a new card number as well as account number.
You could tell them you've tried unsuccessfully to retract your banking details and want to protect your account.
Tell the bank that your ecommerce login was hacked and PP is being slow to protect you, so you want the bank to help you protect yourself AND the bank.