Consumer complaint received 2021-07-15
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Fraud or scam — 
Company: Paxful Holdings, Inc. (KY)

I am contacting the CFPB because I have been defrauded on the Paxful crypto-currency platform. The reason my concerns have reached this level is because Paxfuls remediation process is slanted in a way to reward disputes in favor of the vendors providing most of the liquidity on the platform and against small buyers like myself. In this specific instance the vendor uploaded an obviously doctored photograph that appeared to show that I had provided a used/invalid gift card when that was not the case. As I will describe in detail below the doctored screenshot was sloppily edited and contained a time stamp that showed that it could not have been produced during the time of the transaction. Nonetheless, Paxful still rewarded the dispute in the vendors favor and thus defrauded me out of the value of the gift card that I had provided them. 

Initially, I purchased XXXX XXXX XXXX gift cards planning to use them towards the purchase of a new XXXX XXXX headset. However, after reading a few reviews of the headset I was dissuaded against going through with that purchase and instead elected to convert the cards into BTC ( bit coin currency ). When I first signed onto Paxful I sold the first 2 to a different vendor around XXXX XXXX  and then left to watch the XXXX XXXX XXXX XXXX When I returned later that evening I found a new vendor online who would end up defrauding me. 

In their descriptor the vendor stated that they accepted e-gift cards, but I still wanted to confirm that was the case before releasing the card PIN. The vendor then assured me that they did indeed accept e-gift cards and I uploaded a screenshot that contained all the information required for redemption including the full card PIN and serial number. After a couple minutes the vendor responded that they were unable to load the card. They then attached a screenshot of the supposed error which appears to have been altered. The upper left corner of the screenshot contains a time stamp of XXXX. Although I am not sure what time zone the vendor was in the chat log of the trade shows that it was started at XXXX XXXX  EST. In addition, the vendor uploaded the screenshot of the error they claimed to have encountered at XXXX XXXX  EST. No matter what time zone they were located at the time of the trade its impossible for the error to have occurred at 2 minutes past the hour when the chat log shows the trade occurred in between 28 and 32 minutes past the hour. 

Because the vendor refused to release the coins I had no option but to pursue a dispute through Paxful. In the dispute I provided a description of the transaction, the receipt for all 12 cards that I had originally purchased along with a copy of the altered screenshot the vendor provided. In spite of this overwhelming evidence Paxful sided with the vendor. When I reached out to customer support by email asking for a review I received a formulaic reply within 10 minutes stating that all disputes decisions are final.

I understand that the value of one gift card worth {$50.00} is not a huge deal compared to the sort of complaints that you probably receive regularly related to merchant misconduct for much higher value amounts. However, as a matter of principle the conduct of Paxful should still be exposed to other consumers they may potentially defraud. If they would award a dispute in favor of a vendor that provided a clearly doctored photo it seems impossible for any consumer to get a fair shake on their platform. Rather than carefully review the documentation connected to the conduct of a vendor it appears Paxful bases their dispute decisions by how much liquidity a specific vendor is providing on the platform. If their volume reaches a certain level they will always win the dispute against the small buyer even if overwhelming evidence is provided to the contrary. I understand that the CFPB probably can not help me recover the amount that I was defrauded. Nonetheless, if disclosing the behavior of Paxful prevents another unsuspecting customer from being had it is worth the time and effort to submit this complaint. Thank you for your time as well. 

XXXX XXXX XXXX XXXX.