Consumer complaint received 2021-08-12
Company: Paypal Holdings, Inc
State: CA
Product: Money transfer, virtual currency, or money service
Sub-product: Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem

Complaint:
This Complaint is in regards to PayPal mishandling my funds in my PayPal Cash Account, as well as holding my funds from an invoice that has already been paid out by my client. 

I made a purchase on XX/XX/XXXX and used PayPal to fund the transaction, in which I elected to use my credit card that was linked to my PayPal account. PayPal did not deduct funds from my credit card, rather they took the money out of my PayPal cash balance, which was NOT to be used. They did not alert me, nor notify me that they were taking funds from that balance instead of my credit card to complete the purchase either. I did not discover this until two days later ( XX/XX/XXXX ) and called to inquire & request they correct the error. I spoke to an associate and a supervisor who both advised that nothing could be done, they could not advise why the transaction was not completed from my credit card, as requested and they would not assist after I expressed the need for my cash balance to remain untouched since this was earnings from my sole proprietorship business, which was separate from the personal transaction I attempted to make through my credit card. The only thing they said was that sometimes certain transactions are not be processed by the method in which I have elected and that PayPal automatically pulls from the Cash Balance as default, without notification. I asked how they could unilaterally make the decision to pull money from a different account in which they were NOT directed without communicating or notifying me first, but my inquiry went unanswered. I told them that since they provide a financial service there are laws and regulations in place that protect the consumer, and since a banks can not do that they can not decide which account to pull funding from whenever I make a transaction using their platform. I lost access to the total cash amount of : {$770.00}, which belonged to my sole proprietorship, not for personal transaction use. This amount was supposed to be charged to my credit card. I want my cash returned & my card charged, especially since I was never notified. 

Additionally, a separate issue I discovered when logging in is that PayPal is holding my funds for an invoice that one of my clients already remitted payment for. When I verified that a service was provided they told me multiple different reasons that were not consistent or making sense as to why the invoice would be held. They could not answer my questions and advised that the funds would not be released until the end of the month, or sooner if my client inconveniently took time out of his day to submit additional verification information to them, but I need them ASAP to pay out bills. My invoicing mirrored the same invoices I had sent out earlier that week, and the invoice funds from my prior client weren't held. Nobody could give me specific or valid responses why this was happening. They just kept stating " the system does it automatically ''. However, the system did not do it automatically for my other invoice that I received payment for, so their logic doesn't add up. The platform says the funds will be released a different date than customer service states. I wasn't notified that the funds were on hold either, I was only notified that the client remitted payment for the invoice. PayPal is holding on to my money in their platform. Again, a bank is highly regulated when it comes to transaction deposits, debits and credits, so PayPal should be following these rules as well. I want my funds released totaling {$1300.00}.

Company response to consumer: Closed with explanation