EBay - PayPal UK Customers Beware (Loophole For Theifs) London United Kingdom

Hi all, this is my story:-
After selling a phone on eBay UK and sending the phone to the buyer via special delivery (tracked and insured) the buyer then filed an item not as described claim in PayPal.
As most of you are already aware PayPal normally will rule in favour of the buyer 90% of the time.
The buyer was then asked to return the phone for a complete refund.
HERE'S THE LOOPHOLE
The buyer returns an empty box recorded delivery and then once signed for has proof of returning the phone (even though you just got an empty box) the money is then refunded to the buyer case closed.
NO PHONE & NO MONEY.
I tried every avenue to recover either the phone or the money to no avail.
Police say it's a civil matter.
PayPal say you need a police headed report. (Which you can't get because of the above) eBay are not interested because (well, in their words it's got nothing to do with us).

I used PayPal's appeals process but again hit a brick wall because they ask for a police headed report you just can't get.

You are now left feeling very disregarded and abused by the lack of protection eBay & PayPal promised you but renege on after the event. I feel eBay & PayPal are criminals and should be held accountable for their lies and broken promises to protect its consumers.

I also believe our laws should be updated to prosecute these renegade companies like PayPal & eBay and make them held accountable for their disregard of criminal activity though there online businesses. Many thanks for reading.

Excalibre
Clacton On Sea