Product: Money transfer, virtual currency, or money service

On XX/XX/XXXX of this year, I went to send {$2500.00} to my son. I had about half of that amount in my PayPal account and bank balance, so I decided to send those funds to him, and to use my PayPal credit account to send the balance to him. When I made the transaction, I clicked on my sons name on the send again menu, and sent the funds in two separate transactions, something I had done multiple times.

The transaction number for the one paid out of my PayPal balance / bank balance was XXXX and was for {$1200.00}. The transaction number for the one paid with my PayPal credit account was XXXX, and was for {$1300.00}. 

Transfers of funds like this have always been virtually instant, so when my son hadnt received the funds after a couple days, I began to investigate. I found that the XXXX XXXX who was listed on my send again list was a stranger with an email address I didnt recognize. So the funds from both transactions went to this unknown XXXX XXXX, and not to my son. Again, I have never done business with another XXXX XXXX besides my son. How did this stranger end up on my send again list when I have never done business with him? If this stranger hacked my account, he could have just sent money to himself or a cohort rather than waiting until I tried to send funds to my son. 

I scrambled to raise the funds for my son at great inconvenience. Then I got in touch with Paypal. I discovered that since PayPal and PayPal Credit are two separate entities, I was forced to file two separate appeals. 

Both of my appeals were evidently successful, as both entities credited my account back the funds in question. 

Then, a couple weeks ago, I received notice that my PayPal Credit account was debited the amount from the transaction. When I inquired about this, they said they had credited my account the amount in question while they did their investigation, and that they were now debiting my account again because their investigation had found against me. They mentioned something about me receiving the product I had paid for. Again, this money went to the wrong person because I was dealing with the PayPal site in good faith, believing I was sending again to a person I had never sent to before. I was clearly defrauded, and there was absolutely no product either ordered or received by me.

I then appealed again to PayPal Credit. Evidently they are once again reviewing the case. In the meantime, they are asking me to pay this as part of the monthly billing cycle. I made clear to them that I have no intention of paying for this fraudulent activity. However, my fear is that PayPal will look at this and shut down my account for non-payment. 

If PayPal ( proper ) had the sense to see that this was fraud that I should not be held responsible for, how in the world can PayPal credit not see this? Has there been any action taken against this thief who is clearly doing business on the site and is taking advantage of other customers like me? I have been told nothing. 

I am writing to appeal to you to right this wrong. I have all of my XXXX payments go through PayPal and do other business on there as well. I do not want to funnel all of those transactions to a competitor as it would be a hassle, and I am otherwise happy with the service PayPal has provided me and my businesses over the years. 

Please advise what comes next here. 

Thanks for your attention