Consumer complaint received 2017-04-30
Company: Paypal Holdings, Inc
State: PA
Product: Money transfer, virtual currency, or money service
Sub-product: Mobile or digital wallet
Issue: Managing, opening, or closing your mobile wallet account

Complaint:
I am making a consumer complaint against the digital payment service   Paypal.
I think I opened my Paypal account about ten years   ago though I am not completely sure about that. I used the account for occasional  XXXX  transactions and personal payments ( ie, reimbursing a roommat e for rent ). This  was not a heavily used account. In  XXXX   XXXX , I tried to receive a personal payment and was informed that my account was 'limited '. They did return the money to the payer, so my complaint does not include improper holding of funds.  Paypal woul d not tell me why my account was frozen other than there was 'suspicious activity ' with my bank account. I contacted my bank and they had no record or flags of anything suspicious with my account.     To unfreeze my account,  Paypal requeste d that I email them copies of my driver 's license and a current bank statement. I felt that requiring a DL was a violation of privacy as they already had my SSN, address, and bank account info on file. I chose not to do this and accepted that I no longer ha d a Paypal account. Ab out a year later, I wanted to sell something online so I tried to unfreeze my account. I emailed them a copy of my bank statement and a scan of my DL though I did blur out the number out of privacy concerns. I have no idea how Paypal intended to keep this info secure and felt it was not in my best interest to share my DL number. Their claim of suspicious bank activity could not be verified by my bank so I hesitated to trust them with more of my data.     After their recent loss in a class-action suit in CA regarding improperly freezing user accounts, I contacted them again in  XXXX   XXXX . This time I was told that my account had been frozen because my bank account number had been reported stolen. I asked them why they had not alerted either me or my bank at the time they discovered this. The representative said that is not their policy. The phone rep said I could email in a clear scan of my DL and a bank statement and my account would be unfrozen. He said he would send me an email containing a link to a secure site to upload these documents.     The email never came, and when I shared this information with my bank they were not aware of any issues with my bank account regarding stolen account numbers.     I am making this formal complaint against  Paypal for d  e ceptive business practices. The reason they froze my account could not be verified by my financial institution and they have demonstrated an unwillingness to correct their mistake.     While I have not suffered outright financial loss, the service they provide is nearly a public utility in the area of online commerce. Without being able to move funds through their service, they have effectively rendered me unable to participate in buying and selling online.     What can be done?

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with non-monetary relief