Consumer complaint received 2020-06-18
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc (CA)

On XX/XX/XXXX, I made an online purchase of a XXXX XXXX hedge   trimmer and battery from a company called XXXX. The company purported to be based in the XXXX with a provided address in XXXX XXXX, Michigan. After making the {$69.00} purchase and paying via Paypal ( Id # XXXX ), I received an order confirmation coming from a different company called XXXX. This company has a significant presence of complaints and reported fraud on the internet. Based on this information, it became clear to me that my purchase would be shipped from XXXX, not from Michigan, and that I was likely a victim of a long running scheme that would result in me not receiving what I ordered. I immediately went to Paypal to report on this on XX/XX/XXXX and cancel the fraudulent transaction preemptively, as the company I ordered from was not the company that engaged me for processing and fulfillment. Paypal denied my claim within a day or two without requesting any information from me whatsoever. I was also not able to submit any detailed information about why I claimed this was fraud, nor supporting documentation I had compiled. I understand this decision by Paypal, given that the order was initiated by me, and I decided that even though I could not preemptively address the issue, I would at least have recourse through Paypal to address it as the transaction unfolded. Paypal has structured its business so that there is no phone number to call for assistance, and no other meaningful outlet to discuss problems other than the Resolution Center, which is automated and does not permit consumers to provide any details about their case. One can either submit that a transaction was fraud, or the item was not received -- nothing more. I made multiple inquiries and complaints through the only portal for discussion, the messaging center. Nearly all of these were not responded to. Not being able to communicate with Paypal other than through messaging is an unfair practice. 
My attempts to contact the seller were also unsuccessful -- no surprise there. I attempted to file another claim with Paypal that the product was not received as weeks passed with no movement. When trying to file the claim, Paypal Resolution Center stated another claim could not be filed since I already filed one. This is in contravention to their own policy that allows for one claim for fraud and one claim for item not received. Paypals design of their Resolution Center did not allow me to initiate this second claim. Again, there was also no alternative outlet to call for assistance. Only after me messaging Paypal for assistance multiple times was the claim opened. This apparently had to be initiated by Paypal. There was no clear instruction from Paypal on how to initiate the second claim and it required their affirmative intervention to do so. Is Paypal trying to make it difficult for consumers to exercise their rights within the companys own policies? Even if not, it was very difficult for me as a consumer to figure out how to do this since their system is setup not to allow it. Not being able to initiate this on my own was an unfair practice. 
Regarding the dispute process for the item not received claim, Paypal, while they state to use this option for items not received or items not received as described or wrong items received, did not allow me to provide any description or discussion of the issue. I had no ability to share with them the information about what was happening through the Resolution Center. I did get a tracking number from XXXX and several weeks later, I did receive a shipment. What was the shipment? It was a handkerchief. Sorry, but I did not order a {$69.00} handkerchief. I ordered a XXXX hedge trimmer and battery. Again, no response from the seller. Paypals system did not allow me to provide them with the information that I did not receive what I ordered in this now clearly fraudulent scheme. In my attempts to communicate to them what happened, I sent messages in their messaging system regarding this information along with the transaction information for their reference. No response was received. I had no ability to append information in the Resolution Center because Paypal does not allow it. Finally, I received notice from Paypal that they denied my second dispute because the seller provided evidence of shipping. Really? They concluded with no knowledge of what had been shipped or what condition it was in that the seller was right and should prevail in the dispute. Had Paypal allowed me to communicate with them what was happening, they most certainly would have reached a different conclusion. In fact, they might then realize that their seller, whom they are likely making significant amount of transaction fees on, should have their account closed and be banned from doing business with Paypal in order to prevent future fraud on other consumers. Not being able to submit pertinent information to Paypal regarding the dispute is an unfair practice. 
Paypal has structured their Resolution Center to operate in a way that harms consumers. The fraudulent seller in my case apparently won the dispute because they provided evidence of a shipping tracking number and evidence of delivery. That is true, they did ship something and it was delivered -- just not what it was supposed to. Paypal afforded me zero opportunity to demonstrate why this conclusion was wrong, why the seller is a fraud, and why my money should be refunded and the sellers account shut down. Is Paypal intentionally turning a blind eye to this issue? How many other sellers like this are affecting consumers that also can not communicate to Paypal the same types of problems? Should Paypal be required to go in and research other consumer complaints that were denied for the same reason as this? Should Paypal be required to provide restitution to those affected? I would hope so, lest the protection of consumers be lost for the want of transaction fees earned by fraudulent sellers. 
The dispute process designed by Paypal is unfair under the Unfair, Deceptive, and Abusive Acts and Practices ( UDAAP ) regulations protecting consumers as per the Dodd-Frank Act, Title X, Subtitle C, Sec. 1036. Unfair activities 1. ) cause or are likely to cause substantial injury to consumers ; where 2. ) the injury is not reasonably avoidable by consumers ; and 3. ) the injury is not outweighed by countervailing benefits to consumers or to competition. My experience clearly falls within these parameters. I have suffered monetary injury by Paypal refusing to cancel the transaction from a fraudulent seller and refund my money. Paypal has aided, and continues to aid a fraudulent seller by allowing them to take advantage of the unfair dispute process while harming me the consumer. I, as a consumer, could not avoid the unfair treatment because I was availed no opportunity by Paypal to provide them the necessary information to demonstrate that the seller enacted fraud upon me, nor did Paypal reach out to me to obtain any information. I attempted to provide information to Paypal via the only way to communicate with them -- messaging, but Paypal apparently did not connect that message with the dispute in the Resolution Center. There is no countervailing benefit to refusing to institute a forum to take in pertinent facts and information when addressing disputes. The only benefit is Paypal lowering investigation costs and then being able to further aid fraudulent sellers -- all the while lining its profit through more transaction fees with those sellers. This is at the expense of the consumer.