For further information on what to do, see also the article McAfee PHISHING SCAM ALERT. In this particular case, we blocked the sender, and forwarded the email to phishing@paypal.com. It is also important to note what we did not do: We DID NOT PANIC. We DID NOT CALL THE PHONE NUMBER in the email. We DID NOT FORWARD the email to our friends to ask them what they thought, so that they too could get scammed. We DID NOT ATTEMPT to contact Google, because Google Gmail already provides a method to simply mark as spam or block sender. We DID NOT THINK TWICE about our PayPal account because we do not have one under the email address they said we are using, nor an Apple ID by that identifier. We DO NOT SAVE CREDIT CARD information in our online accounts. We did use ALT-F4 Microsoft Windows kill process hot key to instantly kill the popups. We then proceeded to fully check the system for virus damage.
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Scammer's beware, God has got your number!