The email - well formatted and sporting the PayPal logo - explains that "unusual activity" from a "suspicious location" has been spotted in the recipients' account, making them believe that "someone is using your PayPal account without your knowledge."
It then goes on to say that the best way to resolve this problem and avoid it happening again is to download the attached document, open it in a browser, and follow instructions.
Those who do follow those instructions will be taken to through a chain of spoofed PayPal pages.
First comes the login page, then a page asking for the recipient to enter personal information (name, mother's maiden name, date of birth, address), followed by a page requiring bank account and credit card information, and finally a "confirmation" page.
Lastly, the victim is redirected to the genuine PayPal website.
"The fake forms even do basic error checking to ensure that victims have input the correct types of data," Hoax-Slayer notes, pointing out that this type of sophisticated phishing attempts might even trick more computer-literate users - "especially if they are busy or tired."
If you ever receive an email such as this one, ignore it or, better yet, notify PayPal about it.
And if you are afraid your account has been compromised, be sure to investigate the matter by going to the legitimate PayPal website (definitely not by following a link to it) and logging in from there.