Consumer complaint received 2018-09-14
Company: Paypal Holdings, Inc
State: WA
Product: Money transfer, virtual currency, or money service
Sub-product: Domestic (US) money transfer
Issue: Other service problem

Complaint:
On XX/XX/2017 I registered a PayPal account which I planned to use to accept payments for items sold on XXXX. Between XX/XX/XXXX and XX/XX/XXXX I received payments to my account for said sold items. My PayPal account had a limitation placed on it as a result which at a later time became a permanent limitation after 180 days passed. On XX/XX/XXXX, I received an email stating my PayPal funds were eligible for withdrawal. However, I have not been able to log into my account to withdraw these funds. I receive an error message when trying to log in and am not able to log into my account to access these funds. When calling your regular customer support no one was able to figure out what the problem is. When submitting a XXXX complaint against you previously, I received a response asking me to upload ID, Bank Statement, Credit Card Statement, Proof of Address, and Business Registration Information. I expressed several concerns about this at the time but by concerns were completely ignored. 

I have told PayPal multiple times that I do not own a business thus there is no business information that can be provided for the business information documents requested. The only reason I upgraded my account to a business account was because I was told to do so by a PayPal representative when I was having issues accepting payments initially. I was told that upgrading my personal account to a business account should enable me to receive payments. And the issue receiving payments was resolved after the upgrade. You can see that the business name I set on my account was simply my first name " XXXX '' and is clearly not the name of an actual business. Let me say this again since no one who I have talked to previously has been able to comprehend this : I DO NOT OWN A BUSINESS! 

I have previously raised concerns about how PayPal classifies themselves as a banking institution and PayPal 's actions when dealing with my account are a clear violation of banking laws. Not only because normal banks are not allowed to hold money for 180 days or more, but because banks are not allowed to place stipulations on releasing money and then confiscate the money if those stipulations aren't meant like PayPal is trying to do. In addition to the fact that instead of normal banking procedure which calls for documents to be provided BEFORE an account is opened if they are going to be asked for, PayPal waited until after the account was opened and had already accepted payments before requesting these documents as a condition of allowing me to withdraw my own money. PayPal seems to think this is a plus for customers that they don't ask for documents before sign up but really it's extremely shady. But then I found out that PayPal is registered as a money transmitter in Washington ( my state of residence ) and not a bank so PayPal can then argue they are not bound by banking laws. 

Okay, then you are in violation of Washington 's money transmitter laws. Washington 's money transmitter laws state " Every money transmitter licensee and its authorized delegates shall transmit the monetary equivalent of all money or equivalent value received from a customer for transmission, net of any fees, or issue instructions committing the money or its monetary equivalent, to the person designated by the customer within ten business days after receiving the money or equivalent value, unless otherwise ordered by the customer ... '' 180 days is quite a bit longer than the 10 business day legal limit for holding money according to this statue. Let alone continuing to hold the money afterwards. I attached an image that shows this statue in Washington 's money transmitter laws. 

In addition, PayPal has provided 2 different methods to send documents to them : via email to XXXX or via fax to ( XXXX ) XXXX. I have proof that PayPal doesn't respond to correspondence sent to either of these sources. On XX/XX/XXXX, I sent an email to XXXX about this issue. 8 DAYS later on XX/XX/XXXX, I received a response that didn't address my issue. The following day on XX/XX/XXXX, I sent a reply explaining this and have received no responses since. On XX/XX/XXXX, I sent a fax to PayPal 's fax number ( as more of a test just to see if PayPal would respond ) with a brief letter explaining my problem and asking for an explanation of why I was locked out of my account. I left the PayPal email registered to my account to receive any replies. To this date, I have received no reply. So even if documents were sent to either of these sources, it seems the chances are slim that anyone would actually see the documents. And even if they did, they may or may not be in a position where they understand the issue or can assist. So STOP TELLING ME TO SEND DOCUMENTS TO THESE PLACES. YOU DON'T MONITOR EITHER OF THESE SOURCES. Plus also, XXXX despite their response not addressing my issue, simply said my funds would be held for 180 days. They mentioned nothing about having to upload documents after 180 days. I will attach images of the emails and faxes sent. The only time PayPal ever responds to me besides calling the XXXX number ( which is a complete joke ) is when I file a complaint against them. This is unacceptable and complete XXXX. 

PayPal 's request for documents also poses an unnecessary risk to my personal information and possible identity theft. I am aware that the PayPal subsidiary XXXX was involved in a data breach affecting XXXX XXXX customers. See here : XXXX XXXX XXXXXXXX And PayPal is currently dealing with a class action lawsuit related to this breach. You can say all you want that you take privacy and data security seriously but you know that you can not provide 100 % assurance that any documents provided to you by customers will not end up being hacked/stolen or otherwise end up in the wrong hands. What's stopping one of your own employees from taking these documents and using them to apply for a line of credit in that customer 's name? It's especially not secure to send documents when you're asking them to be sent through unsecured emails or to an insecure fax number. Why don't you send me all of your documents so I can verify you are who you say you are? If you think it poses no risk at all to you? You can upload them as attachments in your response to this complaint. 

If you wish to cite any loopholes in your user agreement that supposedly make this practice of holding funds indefinitely legal, I would like to point out that terms and conditions in a company 's contract that are deemed illegal are not enforceable in a court of law. For instance, a federal court has previously ruled that PayPal 's arbitration clause is not enforceable. See here : XXXX XXXX XXXX A review of PayPal 's user agreement indicates that despite this ruling, the arbitration clause is still present. So honestly, I don't give a XXXX what your agreement says. And apparently the courts don't either. This company is shady. They want to build their terms of service so they can basically do anything they want without regard to the law. And then try to take away a customer 's ability to challenge PayPal 's practices in court. I'll bet PayPal has many other terms that would be deemed unenforceable if challenged in a court of law. Also, why does it say in your recently added terms that even if your identity hasn't been verified you can still withdraw money? You just can't send it or use it to make purchases. But you're trying to tell me that you need to verify my identity before I can withdraw my money. You're contradicting your own policies right there. I'll upload this part of your user agreement too. 

Something else I noticed when doing some searching on this company, Why are 95 % of the comments about PayPal on your social media negative? 95 % is probably giving you the benefit of the doubt by the way. You do realize that's not normal right? Pretty much everyone on your social media pages has some complaint about PayPal. Very few people say good things about this company. I also found several users who commented describing an issue with their PayPal account very similar to mine. Including 1 user who has had their account locked by PayPal for over 15 months. And don't even get me started on the information about PayPal from this site : XXXX XXXX XXXX granted some of this information is outdated like 70 % of PayPal 's cash flow being generated by XXXX. But much of this is still applicable today. Aside from your sketchy ways of asking for documents through insecure means and being involved in data breaches, anyone should be concerned about supplying documents to a company that has your kind of ethics. Any website which allows people to review PayPal needs to implement an option to give negative stars. 1 star is way too good for this company. XXXX XXXX  PAYPAL.

Company response to consumer: Closed with non-monetary relief