This post is for anyone experiencing problems with the PayPal verification step in the IPN process. After pulling my hair out trying to figure this out, I found the solution on another blog.
The Problem:
PayPal by default posts its IPNs using the Windows-1252 character encoding (why would they do that?). If you are like any sensible UTF-8-loving developer, then you will find that your postbacks to PayPal are not receiving the VERIFIED status that ensures they are a legitimate IPN. It seems non-ASCII characters in the IPN parameters are not being interpreted correctly by PayPal (because they are expecting Windows-1252 and you are sending UTF-8).
The Fix:
A simple setting in your business PayPal account under "Language Encodings". You will need to select "More Options" to find the screen that allows you to select UTF-8 from the dropdown.
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Thanks a million for that hint!
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