Yeah, I am sure this is the case. They now charge 10% on final selling fees so it is very tempting to advertise small "cheap" things for 1 penny and bring in the price into the P&P.
Paypal then take 3.4% + 20p I think, so it gets very expensive.
At least for private transactions with trusted people, you can use paypal gift to receive payments, with no fees at all.
