Consumer complaint received 2018-07-19
Company: Paypal Holdings, Inc
State: WI
Product: Debt collection
Sub-product: I do not know
Issue: Attempts to collect debt not owed
Sub-issue: Debt was already discharged in bankruptcy and is no longer owed

Complaint:
I had owned and operated a XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX  XXXX XXXX XXXX XXXX. I became XXXX and was no longer able to work. I had to close the business, which officially ceased operations on XXXX, and I filed for bankruptcy on XXXX. The US Bankruptcy Court sent notices to all my creditors and myself stating that creditors are barred from contacting me and attempting to collect on the debt. 

A customer who had placed a deposit with me on XXXX via Paypal and his financial institution ( in an email dated XXXX, Paypal calls this financial institution a " credit card company '' ) contacted me via email on XXXX. In this email, he acknowledged receiving the notice from the US Bankruptcy Court, but still made an attempt to collect on the debt. 

I contacted my attorney, who sent a letter dated XXXX that told him that his " efforts may be a violation of the U.S. Bankruptcy Court 's order. '' My discharge was issued on XXXX. 

On XXXX ( notice the timing here ), this customer filed a chargeback with his financial institution for the amount of the Paypal transaction, which triggered the case/dispute process with Paypal. Paypal removed the {$94.00} from my account with no notice. 

I called Paypal and subsequently provided them with a copy of all of my pertinent court documents, including the order of discharge. Paypal told me during this or a subsequent phone conversation with them that they would forward all of my documentation to the buyer 's financial institution. 

On XXXX, Paypal issued me a temporary credit for the disputed amount. 

On XXXX, I received an email from Paypal in which Paypal acknowledged receiving my court documents and information. Also in this email, Paypal calls it a " chargeback. '' On XXXX, I received another email from Paypal stating that the customer ( " buyer '' ) " has opened a case for this transaction. '' I was also charged a {$20.00} chargeback fee, which Paypal later reversed after I told them that the buyer was attempting to collect on a legally discharged  debt. 

On XXXX, I received another email from Paypal that stated that " After our efforts to resolve this dispute on your behalf, your buyer 's financial institution decided in the buyer 's favor. '' Apparently his credit card company either never received my court documents or they simply ignored the court order. 

On XXXX, Paypal again removed the {$94.00} from my account with no notice. I called them again. 

On XXXX, Paypal 's legal department signed for and took possession of hard copies of all of pertinent court documents, including the order of discharge. 

On XXXX, I received another email from Paypal, this time from their collections department, demanding the {$94.00}. I called then yet again and told them that they broke the law when they took the money because they are party to collecting on a legally XXXX debt. They said that this {$94.00} was not part of that discharge, since it was credit extended to me in XX/XX/2018. 

Both Paypal and the customer 's financial institution found in the customer 's favor. I had no choice but to pay on this XXXX debt or lose my Paypal account. 

I fail to understand how the customer 's credit card company could find in his favor. The debt was incurred before my filing date and discharged in XX/XX/2018. 

I have since learned that rules and laws were violated in this entire process. Paypal has a XXXX rule for filing a dispute, but the customer was allowed to file a dispute a full 15 months after the initial transaction. And the financial institution broke the law when it found in his favor on a legally discharged debt. The US Bankruptcy Court issued an order of discharge, legally removing the debt, yet the customer was able to collect. The customer and his financial institution are in contempt of court. 

I have also learned that many other disgruntled buyers, scamming buyers, and disgruntled creditors have learned the trick of the " chargeback '' to collect money. 

Without knowing which financial institution this is, I have no recourse in this matter. All I know is that Paypal told me in a phone conversation that they would provide the buyer 's credit card company with all of my pertinent court documents, yet they still broke the law and found in the customer 's favor. And Paypal refuses to name the company, preventing me from contacting them in order to object to the decision. 

My lawyer advised me that taking this customer back to court will probably not gain me anything, and I can't afford to go back to court anyway. And what is to stop my other disgruntled customers from doing the same thing? I thought my debt was supposed to discharged and all my creditors are supposed to be barred from harassing me and retaliating against me and trying to collect on the debt. 

I think that the buyer/customer got by with this chargeback because he had sent me two ( 2 ) deposits, one for {$94.00} on XXXX as a deposit on one product, and then sent a second deposit of {$250.00} on XXXX for another product. This adds up to {$340.00}, which was the total amount of the debt owed to this customer, listed in the court documents. Paypal 's own records prove these two payments were sent from the buyer to me before my filing date. I think he either claimed that the {$94.00} was not part of the court case or he lied to his credit card company about why the funds were sent to me. 

What good is an order of discharge if my creditors can still collect using the chargeback process? 

Is there anything you can do to help me?

Company response to consumer: Closed with monetary relief