Consumer complaint received 2023-06-05
Company: Paypal Holdings, Inc
State: MO
Product: Money transfer, virtual currency, or money service
Sub-product: Virtual currency
Issue: Other transaction problem

Complaint:
By trade I, XXXX XXXX am a XXXX XXXX XXXX  I recently signed up for Paypal in XX/XX/ in order to use its services for the storing and selling of Bitcoin. I initially sent XXXX BTC to the PayPal wallet which was received on XX/XX/XXXX at XXXX XXXX, then sold it in the Paypal wallet on XXXX XXXX XXXX XXXX  receiving an amount of {$1200.00} after Paypal fees and then on the same day transferred it to my bank account. Initially things were going well but then things started to take a turn for the worse after I sent XXXX XXXX to the PayPal wallet which was received on XX/XX/XXXX at XXXXXXXX XXXX then sold it in the Paypal wallet on XX/XX/XXXX at XXXX receiving an amount of {$4300.00} after Paypal fees and then on the same day transferred it to my bank account. While my first two transactions were successfully transferred to my XXXX XXXX XXXX XXXX account listed on file, PayPal decided to put limitations on my account that kept me from being able to withdraw money from my Paypal account since they wanted me to verify my identity. This led to me having multiple calls with Paypal customer service representatives including managers regarding my situation. I was completely transparent with them explaining to them that I was a self-employed day trader that did NOT have nor owned a business and explained how I was using the Bitcoin wallet feature to sell my crypto and send it to my Credit Union . I then further asked if it would be better for me to register my account as a business account in order to show that I wanted to comply with Paypal 's terms and conditions in order to keep further problems from arising. The manager told me that the business account does NOT have access to a cryptocurrency wallet unlike the personal/consumer account and that it would be fine for me to continue using my account in its current conditions after I sent in the necessary proofs. Over the multiple calls that I had, NOT a single person, including managers said anything about how what I was doing would not be in compliance to the PayPal user agreement /terms and conditions of usage. Due to the specific information needed to prove my identity, I was not able to get all the information requested until XX/XX/XXXX but knowing this in advance I called Paypal and asked the rep to put a note on the account that I would be able to provide the final piece of information needed in XXXX. Then comes XX/XX/XXXX, I call over to Paypal and got a rep in the limitations department. I explained to the rep my situation and that I had the final piece of information needed to prove my identity. The customer representative then said that I did NOT need to send in anything else, that they could look me up in public records and then removed the last limitation from my account while I am on the phone. Being a bit suspicious about this, I then asked the customer representative if there is any turnaround time such as waiting a day or two before using my PayPal account to avoid another potential problem. The customer representative tells me that the limitation has been removed in real time and that I am free to use the PayPal account with none of the limitations I previously had immediately. I confirm this by logging into my account on the PayPal website and seeing that the banner that was around the top of the page telling me about the limitations had been removed. In my excitement that I finally could use my Paypal account again for Crypto after three weeks of waiting, I then sent XXXX BTC to the PayPal wallet which was received on XX/XX/XXXX at XXXX, then sold it in the Paypal wallet on XXXX XXXX, receiving an amount of {$5300.00} after PayPal fees and then on the same day transferred it to my bank account. So, I didn't think too much about this until I received an email from Paypal later in the day on XX/XX/XXXX saying " You can no longer do business with PayPal '' stating that I broke the user agreement but failing to provide an explanation of how I broke it in the email. In addition to that, Paypal also denied my recent request to withdraw {$5300.00} from my own account without my consent and then limitations were permanently put on my account to keep me from being able to send, receive or withdraw money from my account and that my funds would be held for 180 days. So, I called up Paypal in regards to this requesting a supervisor. The customer service representative advises me that there were still limitations on the account even after I was told previously that they were no longer any limitations on my account and that I broke the user agreement without explaining how I broke the user agreement. I explained the situation to them and they said that this would be escalated to the back office and that someone would contact me in five days time. I advised them if no one contacted me within that time-frame that I would consider taking legal action for Paypal illegally holding and preventing me from withdrawing my money from my account. Five days go by and I receive no emails and no one has attempted to contact me via phone call regarding the matter. I then on XX/XX/XXXX call in to speak with a manager. I explained the situation to the customer service representative who then promptly brings the supervisor XXXX ( Unsure if that's how he spells his name or not ) on the phone. After looking thru the various notes and hearing the explanation of the rep, XXXX explained that this was escalated to the back office, they still held to their decision to refuse to do business with me and that there was nothing he could do to get the money returned to me until after the 180 days had passed. I then advised XXXX that this was unacceptable and that I would be pursuing legal action against Paypal for illegally holding money in my account that does not belong to them. 


After doing some research on the subject, seeing that this is not the first time that this has happened in regards to Paypal and that a class action lawsuit recently resolved in XXXX of XXXX regarding this exact same issue.

Company response to consumer: Closed with non-monetary relief