Consumer complaint received 2024-06-25
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem — 
Company: Paypal Holdings, Inc (MA)

XXXX XXXX XXXX, XXXX, XXXX XXXX XXXX XXXX, XXXX XXXX XXXX XXXXXXXX XXXX XXXXXXXX XXXX XX/XX/year> PayPal Card Department , Attn : Dispute Resolution XXXX XXXX XXXX XXXX, XXXX XXXX Cc : Consumer Financial Protection Bureau ( CFPB ) , Federal Trade Commission ( FTC ) Subject : Formal Billing Error Notice and Complaint Under the Electronic Fund Transfer Act ( EFTA ) and Regulation Z To whom it may concern, I am writing to formally notify you of multiple billing errors and dispute returned payments associated with my PayPal account. These disputes are being filed under the Electronic Fund Transfer Act ( EFTA ) and Regulation Z ( Truth in Lending Act ). I am requesting an immediate investigation and resolution of these matters.

PayPal misrepresented material restrictions on the use of its debit Mastercard for bill pay, leading to multiple returned payments totaling roughly {$1200.00}. Despite PayPal 's assurances that these were technical errors on their end, the payments failed, causing late fees, penalties, and potential damage to my credit score. This constitutes a violation of PayPal 's user agreement and relevant regulations, and I am seeking immediate resolution and compensation for the resulting harm. 

Customer Service Interaction ID : XXXX - XXXX XXXX XXXX Routing Number : XXXX Account Number : XXXX Debit Mastercard Number : ending XXXX exp XXXX XXXX XXXX Billing Error Details : Date of Transaction Amount of Transaction Merchant PayPal Reference ID Description Customer Service Interaction ID XXXX XXXX XXXX  {$450.00} XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX I initiated electronic funds transfers ( EFTs ) for the amounts and to the merchants listed above on the dates specified. On XXXX XXXX XXXX, I received notifications from PayPal stating that the first three payments had failed. During a conversation with PayPal customer service ( reference ID provided ), I was informed that the errors were on PayPal 's end and that the payments would be processed successfully after PayPal took action to resolve the technical issues. 

Despite these assurances, the payments were not processed, and I received the following information from XXXX regarding the failed transactions : * " Your payment to [ company ] was unsuccessful. Log in and go to Direct Debit settings to make sure direct debit payments are enabled and that your PayPal balance can cover the payment total ... '' I also received a returned payment notification from the XXXX XXXX  XXXX on XXXX XXXX XXXX, stating that the transaction was returned due to a " Non-Transaction Account. '' The payment to XXXX XXXX was also returned by XXXX XXXX XXXX  on XX/XX/year>, with the same incorrect reason. The XXXX payment was initially confirmed as successful but was later reversed due to the issues with the associated payment method. 

On XXXX XXXX XXXX, I received a notification that my payment to XXXX XXXX XXXX was unsuccessful ( confirmation posting # XXXX dated XXXX XXXX XXXX for {$370.00} ). I have not yet received a formal returned payment letter. 

On XX/XX/scrub>XXXX XXXX XXXX I also received a notification that my payment to XXXXXXXX XXXX  was unsuccessful. I have not yet received a formal returned payment letter for this transaction either. 

Regulatory Violations and Concerns : EFTA Violations : 12 CFR 1005.11 ( a ) ( 1 ) : Failure to promptly investigate and resolve the billing errors upon my notification.

12 CFR 1005.11 ( c ) ( 1 ) : Failure to conduct a reasonable investigation into the errors, including a review of relevant information and records.

12 CFR 1005.11 ( c ) ( 2 ) ( i ) : Failure to report the results of the investigation within three business days of its completion.

12 CFR 1005.11 ( c ) ( 2 ) ( ii ) : Failure to correct the errors within one business day after determining that errors occurred. 
12 CFR 1005.14 ( a ) : Failure to properly allocate error resolution responsibilities between XXXX and XXXX, as both are considered financial institutions under Regulation E.

Regulation Z Violations : 12 CFR 1026.13 ( b ) ( 1 ) : Failure to provide accurate information regarding the reason for the returned payment.

12 CFR 1026.13 ( d ) : Failure to conduct a reasonable investigation of the billing errors after receiving my notice.

Additional Considerations : PayPal User Agreement and Debit Mastercard Rules : My PayPal Balance account is a transactional account and is eligible for use with the PayPal Debit Card, as explicitly stated in the PayPal User Agreement and Debit Mastercard rules.

FDIC Pass-Through Insurance : PayPal balances linked to debit cards are eligible for FDIC pass-through insurance, adding another layer of protection for consumers.

PayPal 's Negligence : PayPal 's initial technical errors and subsequent failure to effectively communicate with XXXX caused these issues. Their negligence directly resulted in the returned payments and the associated inconvenience and potential financial harm to me. 

Processing Errors : PayPal 's failure to complete the transactions in a timely and accurate manner constitutes processing errors under their own user agreement. I should not be held liable for any losses or damages resulting from these errors.

Requested Actions : Immediate Correction of the Errors : I request that all payments be immediately processed and applied to their respective accounts. 
Refund of Fees : I request a full refund of any fees or charges incurred due to these errors. 

Investigation and Accountability : I demand a thorough investigation into the handling of this matter by both PayPal and XXXX. I expect a detailed explanation of the steps taken to resolve the errors and prevent similar issues in the future. 

Compensation for Damages : I am seeking compensation for any damages incurred due to these errors, including but not limited to late fees, interest charges, and negative impacts on my credit score. 

I am confident that a thorough review of the facts and the applicable laws and regulations will confirm the validity of my dispute. I expect a prompt and satisfactory resolution to this matter. Failure to adequately address this issue may result in further legal action. 

Sincerely, XXXX XXXX Enclosures : PayPal payment failure notifications XXXX XXXX XXXX XXXX  Failed Payment Notification XXXX returned payment notification ( XXXX XXXX XXXX - Payment Confirmation # XXXX ) XXXX XXXX Credit Card Letter Failed Transaction ( XX/XX/scrub>XXXX XXXX XXXX  - Case # XXXX ) PayPal User Agreement PayPal Debit Cardholder Agreement CFPB Electronic Fund Transfers FAQs