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Am I being scammed by ebay seller?

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I purchased an iphone on ebay & paid through paypal. The payment was confirmed by paypal & item was marked as dispatched. A week later, no item & no response from seller. I put in a claim through paypal to get a refund. Phoned the seller & he says his paypal account has been suspended & he won't be sending the phone & there is nothing he can do about it & says don't worry because I am protected through paypal. He has responded to the paypal dispute giving a tracking number & postal company for the phone he says he won't be sending... obviously a scam? If he sends a book or something instead of the phone through secure traced mail where will that leave my paypal claim & what can I do as it will be registered that he sent me something through the mail?