Money was taken from my PayPal account by a merchant. How did this happen?

You may have entered into a Billing Agreement with PayPal allowing this merchant to withdraw funds from your PayPal account.
 
To see which Billing Agreements are in effect for your PayPal account:
  1. Go to Settings.
  2. Click Payments.
  3. Click Manage pre-approved payments under “Pre-approved payments”.
Note: If you didn't enter into an agreement and believe this is an unauthorised activity, please report it in the Resolution Centre.