Consumer complaint received 2023-10-25
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem — 
Company: Paypal Holdings, Inc (GA)

XX/XX/XXXX, I was making a purchase for a laptop on XXXX and using PayPal as a payment method. My preferred method of payment selected through PayPal is always a credit card, NEVER my checking account. The amount for the laptop was far greater than the amount I had in my checking account, so it wouldnt have even made sense for me to attempt the purchase directly from my bank. Each time I make a PayPal purchase, I confirm that the payment selected through PayPal is a credit card, never an ACH transaction. Long story short, XXXX system kept automatically flagging my purchase as suspicious and canceling my order, so I kept attempting the purchase, each time confirming the correct PayPal payment method via a credit card. I could see where the payment amounts were being credited back to my credit card because of the automatic cancellation of my orders. However, the day following the attempted purchases, my bank account reflected a negative balance, which was shocking because I am always careful of my transactions and always know exactly how much I have in my account. I am never in a negative balance. Upon investigating, I saw almost a {$2500.00} payment ( the same amount as the laptop ) as INSTANT TRANSFER PAYPAL in my recent transactions on my checking account. It looked as if I had directly sent money to someone, which really concerned me. I called PayPal for assistance in figuring out what was going on, and they were no help whatsoever. The agent kept giving me details about refunds to my credit card on file, and I had to repeat myself 5-6 times that the issue was with my checking account and real funds being withdrawn from my bank. I was told Id be given a call back. I called my bank and put a debit freeze on my account, thinking some third-party scammer had hacked into PayPal or something. Later on, PayPal called me back and confirmed that they had initiated the transaction because they fronted the funds when one of my credit transactions didnt go through so they attempted to pull the funds from my checking account to cover the fronted funds they provided, but then they reassured me that the same amount would be returned and credited back to me in a couple days. Once the funds were credited back to my account a couple days later, I contacted my bank and lifted the debit freeze, thinking that all was back to normal. However, this morning I received an automated email from PayPal with the following message : You recently attempted to transfer funds from your bank account. Your bank has declined the funds transfer because your account did not have sufficient funds available. We will automatically re-attempt this transfer in 3 business days. Please fund your bank account immediately to ensure this transaction can be completed. So I called PayPal again to confirm that they were indeed going to attempt to pull the funds again because there was no need to do that since my purchases kept getting canceled and never even went through. The agent told me there is nothing they can do about it and the funds will be debited from my account again. I said that I would like to speak to a supervisor or someone who can cancel the transaction and prevent this from happening all over again, and then I proceeded to wait ten minutes on hold only to be told that they couldnt reach a supervisor so Id have to wait for a call back. This left me feeling very uneasy, and I felt I could not trust PayPal at all, so I called my bank and asked them to close my checking account and issue a new one to prevent further unauthorized debits from PayPal. I feel that this company is operating fraudulently and can not be trusted. Again, I never visually or expressly authorized PayPal to withdraw funds from my checking account, and every attempted purchase through PayPal had a credit card selected, not my checking account. If the payment through the credit card failed to go through, PayPal should not be fronting money and then automatically pulling real funds from their customers checking accounts to cover that. There is a reason customers are choosing to pay with credit cards versus paying with their checking accounts, and usually this is because the item being purchased isnt something they have real funds with which to pay for it just yet. This kind of incident should never have happened, and PayPal should be ashamed of their business practices as well as their atrocious customer service. I am concerned for other customers that may have their funds withdrawn from their accounts via unauthorized debits conducted by PayPal.