is fraudulent, and you have notified both PayPal and your card provider you have nothing to worry about - you won't have to pay. You'll suffer the inconvenience of having the card disabled, but that's life.
PayPal will be helpful if you don't adopt an aggressive approach, they know how to handle this kind of thing, and so does your card provider.
Is PayPal secure? As much as anything is secure these days, yes. PayPal is on of the biggest online transaction handlers on the planet, and nobody knows more about payment security than they do. From what you say you're the victim of a card fraud, and the sooner you talk to PayPal the better.