Consumer complaint received 2015-05-18
Company: Paypal Holdings, Inc
State: MO
Product: Money transfers
Sub-product: Domestic (US) money transfer
Issue: Fraud or scam

Complaint:
I received a {$35.00} NSF charge from XXXX. I have checked out of " Overdraft Protection '' at XXXX to stop these NSF charges. I utilize a low balance account/debit card to pay for items that I purchase online. If the card/account were to be " compromised '' the hackers would not get much/anything. 

On XXXX XXXX, 2015, I received a {$36.00} NSF charge to my account for a {$11.00} charge from XXXX on a recurring charge that bills thru PayPal. I immediately called XXXX and they stated that I was afforded a " XXXX time courtesy '' earlier in the year. 

I contacted PayPal and ask why they did not use my secondary payment method ... ... XXXX XXXX, and I was told that when the charge was sent by ACH to XXXX XXXX, PayPal had no way to check the account balance. Therefore they would do nothing. 

XXXX XXXX said they were charging the NSF fee because they provided a service in returning the charge. XXXX XXXX had paid the charge of {$11.00} to XXXX. On my PayPal statement it shows paid. XXXX XXXX stated that it would take XXXX days for the charge to reverse. 

XXXX XXXX computer triggers a NSF to PayPal, knowing that I have opted out of " Overdraft Protection ''. XXXX XXXX then informs me that they are charging me for a " administrative handling fee ''. 

PayPal says they have no way of knowing if the account has a positive balance or not and therefore I am at fault for the charges even though I have XXXX XXXX as a backup funding source. 

While XXXX XXXX generate over XXXX XXXX dollars in overdraft and NSF fees each year, I can understand how they would try and circumvent the " Overdraft Protection Opt Out '' so they could charge the {$36.00} fee. 

PayPal does not allow a customer to remove their bank accounts or bank cards from their system and use the following charge sequence:XXXX Default Payment Methods. When you make a payment, if you have not selected a Preferred Payment Method, PayPal will fund your transaction in this order : a. Balanceb. Instant Transfer from your bank accountc. PayPal Creditd. PayPal Cardse. Debit cardf. Credit cardg. eCheckYou give PayPal the right to resubmit any ACH debit you authorized that is returned for insufficient or uncollected funds. No consumer knows this as it is hidden in their TOS and if you do not accept the TOS then you can not open a PayPal account. 

PayPal will then use your bank account as the primary source of funding regardless if you have chosen a credit card as your primary payment method. By moving the credit card to the bottom of the charge sequence, PayPal avoids the credit card fee thus improving their bottom line. 

I utilized the " Overdraft Protection Opt Out '' with the express intent of AVOIDING any bank charges beyond the {$6.00} they charge each month because I will not deposit thousands of dollars in this particular account. Obviously XXXX XXXX wants my {$36.00} really bad and will do most anything to get it. 

I find it ironic that XXXX XXXX touts their " ETHICS ''. I would suggest that XXXX XXXX is void of " ANY ETHICS '' if they will stoop the the lows they have exhibited in regard to this fiasco. 

If both XXXX XXXX and PayPal are doing this to me, you can bet they are doing this to millions of others too. XXXX can only imagine the " XXXX '' of dollars they are making on these unscrupulous business practices. 

While I expect nothing to happen, hopefully enough people will stop doing business with these XXXX " modern day XXXX XXXX '' collective of thieves. But then one can only dream.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation