Consumer complaint received 2024-10-25
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Confusing or missing disclosures — 
Company: Paypal Holdings, Inc (KY)

Complaint to the CFPB Regarding PayPal Account Limitation On XX/XX/XXXX, I received a notification from PayPal stating that my account had been permanently limited without any valid explanation. They also informed me that my funds would be held for 180 days. This sudden action was taken without prior notice, causing significant inconvenience and financial distress. 

In the months leading up to this limitation, my PayPal account activity consisted solely of personal transactions, all of which fully complied with PayPal 's User Agreement and Acceptable Use Policy. My activities included : Personal transfers to family members via XXXX XXXX ( XXXX XXXX ). 
Payments for personal expenses such as subscriptions and services ( e.g., XXXX XXXX, XXXX, XXXX XXXX, XXXX ). 
Receiving funds from family members. 
At no point did I engage in any prohibited activities, illegal transactions, or violations outlined in PayPal 's terms. There was nothing in my transaction history that would warrant such severe action from PayPal. 

On XX/XX/XXXX, I sent a formal request to PayPal 's Legal Department, demanding : Immediate reinstatement of my PayPal account.

Immediate release of all funds held in my account. 
A detailed and specific explanation for the account limitation and closure. 
I expressed that their actions were unwarranted and potentially constituted a breach of contract and violation of the covenant of good faith and fair dealing inherent in our agreement. 

In response, PayPal released the remaining funds in my account, which I was able to transfer to my bank account on XX/XX/XXXX. However, they maintained the permanent limitation on my account. In their reply, they stated that they had conducted a secondary review, which confirmed their decision to uphold the account limitation due to unspecified violations of their User Agreement. They refused to provide specific details, citing security measures and company policy. 

I believe that PayPal 's actions are in violation of consumer protection laws and regulations, including : Unfair and Deceptive Acts and Practices ( UDAP ) Laws : Prohibiting businesses from engaging in unfair or deceptive practices.

Electronic Fund Transfer Act ( EFTA ) and Regulation E : Protecting consumers in electronic fund transfers, which encompasses PayPal transactions.

Gramm-Leach-Bliley Act ( GLBA ) : Requiring financial institutions to safeguard sensitive customer information and provide clear disclosures. 
Furthermore, their refusal to provide a specific explanation for the account limitation may be in violation of prior legal settlements, such as : PayPal Account Hold Class Action Settlement ( XXXX ) : In XXXX XXXX PayPal Inc., PayPal agreed to provide clearer disclosures about holds, reserves, and limitations, and to disclose the general reason for any account hold, reserve, or limitation. 
PayPal 's lack of transparency and unilateral decision-making has caused significant stress and has hindered my ability to manage personal finances effectively. Their actions appear to be in bad faith and do not align with the expectations set forth in their User Agreement. 

Resolution Requested : A specific and detailed explanation of the reasons behind the permanent limitation of my PayPal account.

Reinstatement of my PayPal account, provided no legitimate violations are found.

Assurance that PayPal will comply with consumer protection laws and honor the covenant of good faith and fair dealing inherent in our agreement.

I am seeking the CFPB 's assistance in resolving this matter. I hope that, with your intervention, PayPal will address my concerns transparently and fairly.