Consumer complaint received 2023-01-24
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Managing, opening, or closing your mobile wallet account — 
Company: Paypal Holdings, Inc (PA)

On the early morning XX/XX/2023 I received a fraudulent invoice request to my PayPal account for nearly {$500.00} from a cryptocurrency scammer. This scam involves a legitimate email sent from PayPal 's invoicing service, and is possible due to the fact that PayPal does not have any major security limitations on unknown accounts sending customers large fraudulent invoices on company email/letterhead. 

PayPal also does not provide a method to flag or dispute these fraudulent invoices ( in their words, only completed transactions can be disputed ), so the scam invoice stays present and listed on your account in perpetuity. 

This type of PayPal direct invoicing scam has been widely reported on in recent years, as has PayPal 's inability to provide adequate support to affected customers, or to patch the security vulnerabilities that makes this scam possible. 

My story begins when I attempted to use PayPal 's dispute center to resolve this, only to discover that PayPal does not let you dispute or flag these types of invoices. I then spent several hours trying to reach phone support, only to find that their phone system is almost 100 % automated at this point and merely serves to direct you to the dispute center website ( which obviously doesn't work to solve this type of situation ). Essentially there appeared to be no way for me to remove this invoice from my account or to flag it as fraudulent. It seems that PayPal 's view of the situation is that I should merely let a large fraudulent money request remain on my account in perpetuity, appearing as authentic among my legitimate money transfers. 

At this point I decided to close my PayPal account of ~15 years ( and in good standing, {$0.00} balance ) due to the shameful lack of customer service, and the general sense of unease about the security vulnerabilities present in a platform that would let this happen to myself and hundreds of other people. Basically I just don't feel safe having my personal financial information linked to an account that allows this to happen. 

On the late morning of XX/XX/XXXX, I proceeded with the account closure form on the PayPal website, only to be informed that I needed to first close a dormant, {$0.00} balance XXXX account I have with PayPal XXXX. PayPal XXXX is not actually operated by PayPal, but by a legitimate bank called XXXX. 

I contacted XXXX via phone about closing my PayPal XXXX account, and within 5 minutes I had fully closed and settled my account ( no outstanding payments or balances ), and received both a confirmation email and a confirmation text of the closure. Additionally, navigating to the PayPal XXXX website now tells me that my account has been closed and deactivated. 

The crux of my problem begins now. Today, XX/XX/XXXX, I go to the main PayPal website to close my digital wallet account with them, only to be met with an error that my account can not be closed due to the fact that I have a PayPal XXXX account ( which I obviously now don't ). Basically, PayPal 's systems refuse to register that I have closed my linked account, and I have no way to deactivate the link as a customer on their website. 

I call into PayPal phone support and manage to reach a human customer service agent, in order to see if they can resolve the error. I am met with nothing but obfuscation and deflection. PayPal 's first line customer support and a supervisor both tell me that the error is due to me having an open XXXX account, and refuse to accept my confirmation emails or testimony as evidence to the contrary. They tell me that I need to contact XXXX, and refuse to listen when I tell them I have already done so. 

At this point I contact XXXX to double check, and they send me another confirmation and convey to me that at this point, after 24 hours, the main PayPal business has already been informed that my XXXX  account is permanently closed and that there should be no link any longer. The XXXX customer service rep discloses to me that they have dealt with mainline PayPal customers in the same situation before due to PayPal refusing to update their systems in a timely manner ( or at all ). 

Essentially, despite the fact that my PayPal XXXX account no longer exists, PayPal XXXX XXXX maintains a listing of an open XXXXXXXX  account and corresponding personal financial information related to said account, in direct contradiction of the account status with their banking/credit partner XXXX. 

In summary, I am not sure what violations PayPal may be committing but I believe the following to be deeply problematic : A ) Their enabling of fraudulent crypto invoicing scams and refusal to provide any customer support or resolution when they happen B ) The severe disconnect on PayPal 's side in which they are actively disregarding the status/standing of the XXXX account serviced by their partner XXXX C ) The complete inability for me, as a customer, to close my good standing {$0.00} balance account in a timely and reasonable manner and the lack of a clear path to resolution of this issue from PayPal.