Consumer complaint received 2019-12-27
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem — 
Company: Paypal Holdings, Inc (SC)

PayPal is using unfair and deceptive practices when determining which payment method to use when consumers use PayPal to make online purchases. The PayPal app displays the customer 's preferences for payment method, but because of some behind-the-scenes hierarchy of payment methods established for certain types of merchants, they completely ignore the consumer 's preferences and debit the consumer 's checking account, instead. When I contacted PayPal about their error, the second supervisor I spoke with advised that my settings needed to be changed and even she didn't know that it's not possible to do so using the PayPal app on my XXXX. It was then that she advised me to log in through an internet browser to change my preferences so that this issue wouldn't happen again. As a consumer with a long history of using PayPal, I thought I could trust the app to show what would take place once I placed any online orders. How would I, or anyone else, know that XXXX purchase go through an account billing agreement that would have an impact on my transaction? This, to me, is not only unfair, but also deceptive. The app clearly showed my credit card as my preferred payment method. I verified with my bank that my credit card had way more available credit in order to process the transaction, so there was no clear or reasonable reason why my transaction hit my checking account instead of my credit card. The last supervisor I spoke with a PayPal refused to escalate my complaint any further, and instead, offered me several options : 1 ) Add money to my checking account to cover the purchase ( like I have an extra {$500.00} laying around ) ; 2 ) Call XXXX and cancel my order ( which means I won't get the gifts I ordered for my grandkids as those items were of limited availability ) ; 3 ) Write a letter to PayPal 's legal department because she refused to escalate my complaint to anyone else at PayPal. She was even kind enough to give me the mailing address for the letter. 
Transaction details : Yesterday I used PayPal to pay for two online purchases from XXXX for items that rarely come up for sale, much less at " sale '' prices, totaling {$500.00}. Before doing so, I checked my PayPal app on my XXXX to see that my preferred payment method was set to charge my credit card and not my debit card or bank account. The attached screen-prints from the PayPal app show my payment preferences are to charge my credit card first, then my bank account, debit card, etc. However, I learned today that my checking account was debited for the purchase and not my credit card - and there's nothing PayPal will do to correct this mistake. 
The biggest issue I have with this is, I need to pay bills out of my checking account and was opting to use my credit card for this purchase as I will be paying it off at a later date. I use my credit card 's rewards program for other purposes, and no rewards for this transaction. Now, I'm faced with waiting up to 5 business days for a refund from XXXX that will go to PayPal, not my bank account. I can then process a payment from PayPal to my bank account which will take a few more days. In the meantime, I am " out '' over {$500.00}, had to cancel the order that caused this mess, and I have spent literally hours first trying the PayPal chat with two agents ( useless ) then again with three different PayPal agents/supervisors on the phone. All of them were much more focused on schooling me as to how their system worked instead of realizing they are defending an unfair, deceptive and absolutely abusive practice of misrepresenting how a consumer 's funds will be processed in the PayPal app versus how the funds will be handled " behind the scenes '' in their back-office schemes. The issue here is a complete lack of understanding of the financial impact and heartache caused by this. Personally, this is causing a lot of unnecessary anguish, time spent to get nothing resolved, and I'm still in a financial bind and even lost the bargains I found for my grandkids because I had to cancel the order. 
I've heard over and over while waiting on hold for a supervisor three times how PayPal can be considered a " safe '' to keep your financial information and how they take their years of experience to make online shopping safer. I will never again trust PayPal for any payment of any kind and I'm sure there are other customers who were put in similar situations because they are deceptive in how they represent what will happen when a customer uses them for online purchases. I've never seen a clearer case of unfairness, deceptiveness, and an abuse of power over a consumer 's financial standing.