Consumer complaint received 2025-07-16 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unexpected or other fees — 
Company: Paypal Holdings, Inc

Complaint narrative:
To Whom It May Concern, I am writing to formally lodge a complaint against PayPal , Inc. for engaging in deceptive and unfair billing practices, particularly as they relate to foreign currency transactions involving U.S.-based account holders residing abroad.

As a U.S. citizen living overseas, Ilike hundreds of thousands of expatriatesmaintain a U.S. credit card and a U.S.-based PayPal account for the convenience of purchasing services online. PayPal regularly presents itself as a trusted payment intermediary, yet it obscures critical information during transactions that result in unexpected and excessive fees. 

I want to emphasize this misleading practice not only impacts expats, but also impacts any american tourist traveling abroad, or americans buying foreign goods and using paypal. For example, in XXXX, with american cards you can only buy transit tickets with Paypal on their main mobile application -- XXXX -- and visitors of mine are routinely overcharged with paypal 's forced conversion while visiting. 

Issue Summary : When making purchases denominated in a foreign currency ( such as EUR ), PayPal routinely defaults to converting the currency itselfat rates that include a markup of approximately 45 % above the interbank or Visa exchange rate. While it is technically possible to opt out of XXXX conversion and allow the credit card issuer to handle the exchange at the standard Visa rate, this option is buried behind non-obvious hyperlinks, small-text disclaimers, or nested menus that appear only in certain flows or platforms. 

In certain situations, such as purchasing airline tickets on XXXX website, this choice is removed entirely. Despite explicitly selecting to pay in XXXX  on XXXX site and choosing PayPal as the payment method, PayPal unilaterally converted the charge into USDwithout presenting a final confirmation screen, an option to reject conversion, or any indication of the markup. 

On two separate occasions over a span of two years, with the same merchant ( XXXX ), I have actively selected XXXX for a transaciton, and on both occasions, I was charged in USD at an inflated rate without my knowledge or consent. 

Both practices are unfair and misleading, but in this instance I don't even have the technical option to avoid the fee during the first time I am making this transaction with a new merchant ( as the option to not convert is somewhere hidden but available, but only per merchant saved ). 

Customer Support Failure When I contacted PayPal customer support previously, I was told that my only option was to open an XXXXbased PayPal accountwhich is a red herring to unfair practices. This time, customer service did not provide an option to escalate the complaint in writing and directed me to a chat queue, where no representative was available. This constitutes not only poor service but also an intentional barrier to dispute resolution. 

Relevant Legal and Regulatory Concerns I believe PayPals practices violate both the CFPBs standards for fair billing and transparency under the following frameworks : 12 U.S. Code 5531 : Prohibition of Unfair, Deceptive, or Abusive Acts or Practices ( UDAAP ) PayPals currency conversion behavior may qualify as a deceptive practice, defined as one that misleads or is likely to mislead a reasonable consumer. The failure to clearly disclose the cost of conversion and the removal of the ability to opt out supports this definition.

Electronic Fund Transfer Act ( Regulation E, 12 CFR Part 1005 ) Consumers are entitled to clear disclosures of terms related to electronic fund transfers. PayPal 's hidden exchange rate settings and lack of upfront conversion transparency undermine the purpose of Regulation Es disclosure rules.

Dodd-Frank Wall Street Reform and Consumer Protection Act This law grants CFPB the authority to act against companies engaging in abusive financial practices. Forcing consumers into a high-fee exchange without consent or reasonable ability to avoid it could constitute such abuse.

Request for Investigation and Redress I respectfully request that the CFPB investigate PayPals handling of foreign currency conversions and their lack of transparency. At a minimum, consumers should be : Promptly and clearly informed of any conversion and associated fees before the transaction is finalized. 

Given a clear, accessible, and consistent way to select who performs the currency conversionPayPal or their card issuer. 

Allowed to apply a universal preference across their account, allow for confirmation before applying a forced conversion, rather than obscure per-merchant or per-transaction settings ( so deep in their website, that I honestly could not find it a second time ). 

This complaint is not solely about the monetary loss ( approximately {$5.00} per incident ), but about the principle of informed consent and the need for fair access to financial services for U.S. consumers abroad. 

Thank you for your attention to this matter. 

Sincerely, XXXX XXXX

Company response to consumer: Closed with explanation