Consumer complaint received 2018-12-07
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Unexpected or other fees — 
Company: Paypal Holdings, Inc (MD)

According to PayPal, a person can send money for fee-free via PayPal as long as they : ( 1 ) designate the money transfer as " Sending to friends and family '', and ( 2 ) funds the money from either a PayPal-linked bank account or the sender 's PayPal balance. Unfortunately, I learned that such a transfer of money is NEVER fee-free if : ( 1 ) the money recipient initiates a request for the sender to send money via the " Request money '' feature on PayPal, and ( 2 ) the money sender responds to the initiated " Request money '' request to send the recipient money. This is true even if the recipient intended for the request to be " friends and family ''. I am filing this XXXX   complaint because I believe recipients are not sufficiently made aware that requesting money using PayPal 's " Request money '' feature is never fee-free. Furthermore, I believe PayPal uses deceptive practices to get people to think that the " Request money '' feature can be fee-free. 

Here 's the situation : On XX/XX/2018, I used the PayPal smartphone app to request money ( {$5.00} USD ) from my sister using the " Request money '' feature ( Transaction ID XXXX ). I intended for money to be sent using PayPal 's " friends and family '' feature ( i.e., so that neither I nor my sister would be assessed a fee ). I believed I could do this based on BOTH written information on PayPal 's website ( see https : //www.paypal.comXXXX ) and information communicated by video on PayPal 's XXXX XXXX ( see XXXX XXXX XXXXXXXX ). I believe any reasonable consumer would agree with me that the information provided at the above-cited sources make it seem like a person CAN request and receive money fee-free using the " Request money '' feature. 

As you can see from the XXXX video, there is NO WAY to indicate within the " Request money '' feature of the PayPal app to designate the request as a " friends and family '' transfer ( as opposed to a " goods and services '' transfer, which would assess the recipient a 2.9 % fee + a non-refundable {$0.00} per transaction fee ). I was only ever given the warning ( also shown on the XXXX XXXX ) that if I'm " requesting money for goods and services, [ I ] 'll pay a fee when [ I ] receive the money. '' While I was unnerved by the fact that I could not designate my money request as " friends and family '', I assumed my sister would be able to designate the money transfer on her end as " friends and family ''. 

I assumed wrong. My sister received my money request by email. The email message prompted her to click a link to log in to her PayPal account and complete the money transfer. While completing my money request, she too was NEVER given the option to designate the transaction as " friends and family '' ( which she intended ). She selected the option to send money from her PayPal-linked bank account and was only shown text that she would not be charged a fee. 

Upon my sister sending me money on XX/XX/2018 ( Transaction ID XXXX ), I noticed I was assessed 2.9 % fee + the {$0.00} non-refundable per transaction fee. When I contacted PayPal customer service about this ( I contacted them about 5 times over the period of XX/XX/2018 ), I was told every time that my sister sent me money via the " goods and services '' feature and that while the 2.9 % fee is refundable the {$0.00} fee is not. I was also told that every time that customer service is unable to credit my account and that I would have to eat the {$0.00} fee. 

I am very upset by this situation because neither I nor my sister were EVER given the opportunity to designate the transaction as " friends and family ''. Yet, PayPal automatically defaulted the transaction to be a " goods and services '' transaction, forcing me to face a {$0.00} fee, without my permission, choice, or intent. 

I searched the PayPal Community Help forum, and I found numerous cases of others facing the same issue I did. This is indicative of the fact that the problem I faced is not a one-off issue ; rather it is part of a larger, more pervasive problem that PayPal is simply profiting off of at the expense of its consumers. 

Here are just some of the examples I found of others who faced the same issue I did : XXXX XXXX   XXXX https : XXXX XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX   XXXX XXXX XXXX XXXX XXXX XXXX   XXXX XXXX XXXX  XXXX XXXX XXXX XXXX Moreover, based on the answers I found in the Community Help forum, I discovered that using the " Request money '' feature ALWAYS results in a fee : XXXX : XXXX XXXX XXXX   XXXX XXXX XXXX XXXX XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX XXXX