Bill Me Later Paypal's Bill Me Later scam Internet

In February of 2012, I used Bill Me Later for a purchase. That was the first and last time I used the service. In July of 2012, I purchased an item on ebay and paid for it using PayPal as i usually do with online purchases. Several months later I received a bill from Bill Me Later stating that I owe them for this purchase. I informed them that I did not bill the purchase to Bill Me Later, so this constituted an unauthorized re-routing of my PayPal request to Bill Me Later and requested that they reverse their error and return the charge to PayPal so I can pay for it. They stated that due to internal regulations this is impossible (even though Bill Me Later is a part of PayPal) and the only option would be for me to have the merchant refund the item and then pay for it using PayPal. Unfortunately, by this time (more than 3 months after the purchase) the merchant refused to refund the purchase or transfer the fee to another mode of payment. I have called Bill Me Later and PayPal several times to rectify the issue but they refuse to resolve this issue, even though it has resulted from their unauthorized use of my Bill Me Later account for a charge that I had directed to the PayPal account. After months of phone calls with all parties involved and not having any success in resolving the issue, I have lost all hope of PayPal resolving this issue. I took my complaint to Better Business Bureau but PayPal remained unrepentent of their intentional or mistaken unauthorized use of the Bill Me Later account. I have decided I will not yield to this man-handling of my rights and will broadcast it as much as I can.