Consumer complaint received 2020-05-13
Company: Paypal Holdings, Inc
State: CA
Product: Money transfer, virtual currency, or money service
Sub-product: Virtual currency
Issue: Other transaction problem

Complaint:
Hello, I am writing as I am very concerned about PayPal 's electronic invoicing feature. This feature allows an accountholder to send a virtual invoice to specific party via email so that party can then click to electronically pay this invoice. I was never informed that these electronic invoices can be transferred from the addressee to another party for payments. The details are as follows : We rent furnished apartments. Various parties contact us to rent our units. Once we arrive at the rate, the terms and conditions, we send a PayPal invoice to the specific party 's email address with their specific name. This party can then pay the invoice to secure the rental. We were never informed by PayPal that their digital invoices could be transferred and paid electronically by unknown parties. This practice of allowing random, unknown parties to pay invoices subjects PayPal accountholders to tremendous liability. 

In this instance, XXXX XXXX XXXX made an agreement with an agency to rent an apartment. An electronic PayPal invoice was sent to the agency. That agency subsequently forwarded that invoice to another Third Party and the invoice was paid by the Third Party unknown to XXXX XXXX XXXX. That party later requested a refund from the agency. When they were unable to secure a refund from the agency they filed a complaint against XXXX XXXX  XXXX stating that we violated the terms of an agreement. 

We never had any prior contact with this client and our invoice was not addressed or emailed to this client. Instead of referring that client back to the agency with whom he consumated the transation, PayPal deducted {$5400.00} from our account stating that the client did not receive the items he purchased. The item the party paid to purchase was for a stay in an apartment in XX/XX/2020 - he would not have received the item as his stay dates are Augsuts. He informed PayPal that an agent forwarded him the invoice and they paid with the understanding that they could cancel with 60 days notice. 

Given the number of payments received, we can not know that an unknown party is paying a given invoice - we assume that PayPal will only accept payments on electronic invoices from the party to which it was addressed and sent via the PayPal portal. 

This is a dangerous practice. We make an agreement with a party and send a PayPal electronic invoice for payment. That party then sends it to another party, makes completely different represenations, and PayPal holds the sending party accountable. As users/customers, we are relying on the tools that PayPal provides - there is no disclaimer that indicates that Customers/Users should use these tools at their own risk. PayPal has a fiduciary responsibility to ensure that they are not accepting payments on our behalf from unknown parties - especially when the invoice was not addressed nor sent to that party. 

If a party pays an invoice that is not addressed to them - they are subject to the terms and conditions of the party to whom the invoice was sent - especially electronic invoices. PayPal has no right to make the invoice issuer responsible for issues occurring between the invoice recipient and unknown parties. I am writing to request that we be refunded from the chargeback to our account in the amount of {$5400.00}.

Company response to consumer: Closed with explanation