Consumer complaint received 2019-02-10
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc (NJ)

I am a XXXX XXXX XXXX  who was caught in the middle of a series of PayPal transactions gone bad - between my former CLIENT and a BUSINESS OWNER, to whom my CLIENT was contracted and providing my creative work. 

I was scammed by one or both of these parties, and have suffered tremendously as I've tried to figure out how to deal with the repercussions. 

During last summer of 2018, my CLIENT claimed that he wasn't able to use his PayPal account, and convinced me to process payments from a BUSINESS OWNER with whom he was contracted. He directed me to keep a portion of the transferred funds to pay for my design work, and then to deposit the rest into his business accounts. Looking back, it was not really a legitimate way to get paid - but at the time I trusted my CLIENT, who was very manipulative and convincing. I also knew that we were doing the work for this BUSINESS OWNER, and didn't anticipate the problems that would arise. 

There were 3 payments made by the BUSINESS OWNER through my PayPal account, between XXXX and XX/XX/2018, between 3-4 thousand dollars each. Out of each these payments, I only kept about one thousand dollars, to pay for my design services. The rest was deposited into my CLIENT 's  business accounts, at his direction. 

I have documentation of all the creative work I did, the bank transfers, and my CLIENT 's conversations directing me to accept the payments and make the transfers. 

On XX/XX/2018 I received emails from PayPal stating that all 3 payments were being recalled by the BUSINESS OWNER, who opened claims with PayPal through his credit card company ( XXXX XXXX ). He claimed that he did not receive the work from my CLIENT, and wanted his money back. 

These claims immediately put my PayPal balance at - {$11000.00}, and has made me unable to use PayPal to process any transactions for my design services. 

I was completely shocked and contacted my CLIENT immediately, to find out what was going on. I never had any contact with the BUSINESS OWNER, as I was just a 3rd party XXXX who assumed that my CLIENT was providing the work, as he claimed. 

After I informed him of these claims against my account, my CLIENT assured me that he would provide documentation to prove that he provided the work. He also claimed that this BUSINESS OWNER was in financial trouble, and was trying to quickly recoup money by making these claims through PayPal against me. 

After several delays over the holidays ( which were completely ruined as a result of my distress over this situation ), I finally pushed my CLIENT for the proof he promised. He refused to cooperate, simply stated " No '' and wished me the best, abruptly cutting ties with me after a year of working together. Once again, I was left in shock ... 

The only documentation he ended up providing was his contract with the BUSINESS OWNER. This was no use to me, since I already had this contract on file, from when my CLIENT originally shared it with me ( to brag about this new account he acquired ). This proved my suspicion that he was lying to me about providing the documentation to help my case. He was stringing me along to get more work out of me. 

Without any supporting documentation from my CLIENT, I went through the PayPal resolution process, providing all the information I had on my end to prove that : 1 ) I was not a contracted party, nor responsible for delivering the work. 
2 ) I had supplied all the creative work to my CLIENT, with the expectation that it was being delivered to the BUSINESS OWNER. 
3 ) These payments and transfers were made at the direction of my CLIENT, who received most of the money. 

I made all the creative work available for download online and supplied a link, completely negating the BUSINESS OWNER 's claim that he didn't get any work. 

Also, I questioned why he would continue making payments for large amounts *THREE* times, if he didn't get his deliverables after the first payment! 

Unfortunately, XXXX XXXX has sided with the BUSINESS OWNER, despite the evidence proving that the legitimacy of his claims were questionable. 

Despite all my efforts to prove my innocence in this situation, PayPal 's position is that their hands are tied, since the chargeback was made through XXXX XXXX. Therefore, despite being the only honest person in this scenario, I am stuck with this debt, while the other two parties BOTH got their money! 

PayPal 's collections department has been calling me about this debt, and instead of avoiding them, I have confronted them about the situation and maintained that I have been ripped off. 

I have calls with PayPal 's representatives that I've recorded- where they admit that I was a victim of fraud, but that I am STILL responsible for this debt! It is truly outrageous that there is no recourse, other than paying this debt, for which I am not responsible. 

PayPal has suggested that I pay a minimal amount to keep the debt out of 3rd party collections, and to show " good faith ''. I will not pay a dime, and don't understand why I should be the one showing " good faith '' and paying this debt, when I am the victim of fraud! 

I have been using PayPal for years, and have never had another incident before this. I am an honest, XXXX XXXX just trying to make a modest living. My only fault in this matter is trusting a con-man, my former CLIENT. 

There is absolutely no protection from PayPal or the credit card companies for anyone who falls victim to fraudulent chargebacks or claims as a result of transactions involving " intangible goods, '' as my services apparently fall under. 

I am making this report because I feel like I have run out of options with dealing with these giant financial institutions, who allow this kind of unscrupulous & fraudulent activity to occur in their flawed systems. 

My hope is that the involvement of the federal government, and the CFPB in particular, will affect the way this kind of situation is handled in the future. I also hope that it results in more protections for those providing goods and services through online transactions. The buyers are not the only ones who can be victims of fraud. 

Thank you for the attention to this matter, and for hopefully helping to reach a resolution that is just and reasonable.