Consumer complaint received 2021-10-19
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Managing, opening, or closing your mobile wallet account — 
Company: Paypal Holdings, Inc (CA)

On Wednesday, XX/XX/2021, I received emails from both Paypal and Venmo ( a Paypal subsidiary ) indicating that my account had been suspended for a violation of Paypal 's Acceptable Use Policy [ " AU '' ] that is part of its Paypal User Agreement [ " PUA '' ]. The emails and notifications from the company did not specify further what the violation may have been, and only urged me to review the AU and make that determination on my own. 

After reviewing the AU, I determined that none of my posted transactions were violations of the XXXX, and could not figure out how they would have been flagged as such. I called the Paypal support hotline, where I was told that there was no further information. I requested to speak to a supervisor, and after being put on hold for 30-minutes my call was disconnected. I called the Paypal XXXX XXXX office afterward, and spoke to another individual who told me that while he did not have any more information, he could see that my account was flagged for review and that I should receive a message from Paypal within 72-hours regarding the status of my account. 

After the call I filed a complaint with the XXXX XXXX XXXX [ " XXXX  '' ], detailing this information, requesting a reinstatement of both my Paypal and Venmo accounts, or alternatively requesting a reasoned and factually-supported explanation of why my account violated the accepted uses. That report was submitted on XX/XX/2021 ( Complaint Case # XXXX - Ref # XXXX - documents attached ). 

On XX/XX/2021, I received another email from Paypal linked to a message reaffirming that my account was permanently closed. 

On XX/XX/2021, I received a response from the XXXX  indicating that Paypal had responded. In that response, Paypal 's representative " XXXX XXXX XXXX indicated that my account was closed because " the level of risk associated with your accounts is too great. This permanent suspension applies to all current PayPal accounts held by you or any further accounts you may open in the future. '' She further wrote that " our decision about holds, limitations, and reserves may be based on confidential criteria that are essential to our management of risk and the protection of PayPal, our customers, and/or service providers. We may use proprietary fraud and risk modeling when assessing the risk associated with your account. Due to this proprietary confidentiality, we can not provide any more details or specific information regarding your account limitation or the activities that led to your accounts being limited. '' This opaque answer is dissatisfying for two reasons. First, there is no mention that I proactively violated the PUA or AU policiesinstead, there is new language about a " risk '' determination. This risk determination is not mentioned in the AU policy, and there is no guidance to understand what behaviors or activity that is not covered by the AU is somehow deemed " risky. '' It becomes difficult to comply with rules that are " proprietary '' and algorithmically determined, because it represents a black box to the consumer. 

Second, the insistence that my account will remain closed is a great hamper to interacting with my secondary businesses and services. This is because Paypal and Venmo is a near monopolistic market participant. If there were countless payment transacting services that had equal market-share, then it would be somple for me to simply move to a different service provider and be done. But that is not the case. Paypal enjoys market dominance, and as such I am no longer able to process payments with innumerable vendors, including brick and mortar stores who only process payments using Paypal or Venmosomething that is occurring increasingly. Despite its status as a private company, its function as a financial service provider means that it has disrupted my access to other businesses through a cloaked and unaccountable internal determination.