Consumer complaint received 2019-01-10
Product: Checking or savings account — Other banking product or service
Issue: Managing an account — Funds not handled or disbursed as instructed
Company: Paypal Holdings, Inc (TN)

This is a complaint about PayPal Merchant Services. I am an XXXX. I have used PayPal to handle credit card payments from clients for years with no problem. On XX/XX/2018, a potential client contacted me at the XXXX XXXX XXXX XXXX. She had a XXXX  issue. I agreed to handle it for a flat rate fee of {$500.00}. It is fairly easy to do on PayPal. I got her email address, created an invoice which sufficiently described the service and emailed it to her. She immediately paid it. I started by writing a letter to an involved third party. Before I sent it, I called some attorney friends and experts in the area involved. After finding out the possible best course of action, I contacted a particular state employee in her county. The employee told me that she could handle it if my client brought her original divorce documents to her with a {$40.00} fee. I also took down the name of the state official, and she took down my client 's name. I called my client at my office and scheduled an appointment on a morning in early XX/XX/2018 to meet at my office to return her original documents and tell her who to see to handle her issue. My billable hourly rate is {$200.00}. I exceeded the {$500.00} threshhold but did not bill her for excess due to the flat rate agreement. I never heard anything back. Several days later, I received an email from PayPal indicating that {$500.00} had been removed from my PayPal account. PayPal told me that the lady had just reported it to her banking / financial institution, who issued the payment to PayPal, as an " unauthorized transaction. '' It was noted as " item not received. '' I called my client and left two voice mails asking about the transaction. No return call. I wrote an email, which was not returned. Then, I called the state official, and she told me that my client did not come by. I wrote my client and asked her what was wrong, because I had completed my job. Again, no return call or email. I filed a dispute, as instructed, in PayPal 's " Resolution Center. '' The dispute is still " under review, '' as PayPal indicated that they are trying to work with her bank. I was told that PayPal 's " Seller Protection '' did not apply to " intangible services. '' Intangible services are vaguely defined in PayPal 's user agreement, but do not include " XXXX  services. '' It is very debatable that the service was intangible, because her documents existed, she met me twice at my office, the document in question, an auto title, existed, and I now know the state official. I have her email address and phone number. Everything is capable of verification. The lady had told me that she was low on money at one point, and my theory is that she did this to have more money for XXXX. The problem is that now that I have read PayPal policies, it is entirely unclear if the client did have a problem with my services, whether she should have used PayPal 's dispute " Resolution Center, '' contacted the credit department at PayPal, contacted only her bank, or done all of the above. Also, since PayPal directly reaches out to attorneys to do credit card transactions, and their services are not defined in exclusions to Seller Protection, why would PayPal immediately allow the removal of money from my account without any investigation. In fact, I don't know where the money is. Is it in escrow? Does PayPal have it? Does the client 's bank have it? If I had done the work, billed her, and she had not paid, it would be a debtor/creditor situation. However, since she paid me, I did the work and she stole it back, it is really theft of services and misrepresentation to a financial institution. I talked to a detective, and he presented it to the District Attorneys ' office. They agreed with me but said it would be better to pursue it through civil process. I decided to try to work through CFPB before paying to file a lawsuit.