Consumer complaint received 2026-03-22 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem when making payments — Problem during payment process
Company: Paypal Holdings, Inc
State: NC

Complaint narrative:
Date : XX/XX/year> Subject : Complaint Regarding Payment Authorization Practices and Use of Backup Funding Sources Dear Sir or Madam, I am submitting this complaint to request regulatory review of payment authorization practices used by PayPal, particularly involving the use of backup funding sources when a consumer has selected a specific payment method and a bank has declined the transaction due to suspected fraud. I attempted to make an online purchase using my debit card through my PayPal account. I intentionally selected the debit card payment method because I did not want the transaction connected directly to my personal or business checking accounts, which are also linked to my PayPal account. My bank declined the transaction because it appeared to be potentially fraudulent. Despite the banks fraud decline and my selection of a specific payment method, PayPal proceeded to fund the transaction by attempting to charge my linked business checking account without my knowledge. I did not authorize the use of this account for the transaction, nor was I aware that PayPal could override my selected payment method and attempt to charge another linked account ( claiming preferred account ). Additionally, the merchant had misrepresented the purchase. The transaction ultimately differed from what was originally described, multiple charges appeared, and an automatic or recurring billing arrangement was setup and was not disclosed at the time of purchase. These circumstances contributed to the bank identifying the transaction as suspicious. To add to the suspected fraud, the merchant QR code scan was invalid ( temporary unavailable or permanently removed ) based on the scan. The merchant was not located in the XXXX but in XXXX. There was no phone number connected only text. I am also concerned about the use of backup funding sources referenced in PayPals user agreement. While such provisions may exist within the agreement, they are not clearly presented to consumers during the transaction process. When a consumer selects a specific payment method at checkout, it is reasonable to believe that only that method will be used for the transaction. Automatically charging or attempting to charge another linked accountparticularly after a bank has declined the transaction due to suspected fraudundermines consumer control over payment authorization and may create confusion for consumers who are unaware of this practice. Although the funds were eventually refunded, this situation raises broader concerns regarding whether PayPals payment practices provide adequate transparency and consumer control over payment authorization. Consumers may reasonably believe that selecting a specific payment method limits authorization to that method alone. I respectfully request that your office review whether these practices provide adequate disclosure and consumer protection, particularly in situations where a bank has identified a transaction as potentially fraudulent. Thank you for your time and attention to this matter. Sincerely, XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation