Consumer complaint received 2025-12-14 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc
State: GA

Complaint narrative:
On XX/XX/year> at XXXX money was illegally removed/transferred by an individual from my PayPal account in the amount of {$4800.00}. Since the amount in the PayPal account was less than the amount submitted for payment, PayPal withdrew the remaining funds from my XXXX  XXXX XXXX checking account. 

Name and e-mail has been removed. A police report has been filed. 


I set up a dispute with PayPal at the point of being notified by PayPal of the transfer.

I contacted my bank and informed them of the situation. The bank already had this transaction tagged as suspicious and was in the process of rejecting the request for payment. My call to them confirmed this was fraud and they reversed the transaction back to PayPal. I also closed my checking account and opened a new one. I canceled all my cards for protection. I acted very quickly ( within minutes ) of being aware of the situation with my bank and also PayPal. 


I filed a dispute with PayPal which was rejected, I filed an appeal which was rejected based on their view that this was a normal transaction. I refute that. The PayPal account I have is for a US distribution model which uses XXXX as its storefront. Orders come into the PayPal account and twice a month money is transferred from PayPal to a business bank account - these amounts are around {$1000.00}. 
All other 'Payment to " are for postage. In 2025 these amounts range from {$4.00} - {$5.00}. There was a purchase made for {$54.00}. The fraud was for {$4800.00}. This is not the normal pattern of payments that PayPal claim. This is also not a " payment to " person made to previously. 
The balance before this fraud sitting in PayPal was approximately {$560.00}. How can PayPal therefore transfer more than the balance and then attempt to recover the balance form my personal checking account without authorization from myself. This situation puts all PayPal account holders at risk from fraudulent activity by not protecting their customers. If there is a way to prevent this then it is extremely hidden within their site.

Also, there doesn't seem to be an easy way to set up a 2FA authorization which would have enabled me to reject the request.

I feel that PayPal has not acted to prevent these types of fraud within their system, do not make it obvious within their site to set up additional security checks for payment out, to cover themselves ( but not the custom
er ) by charging any negative balance to the customers checking account, to process the payment causing a 10x dollar amount negative 
balance without checking with the account holder or their own systems picking this fraudulent activity. By not rejecting the 'payment to " request as it was almost 10x over the account balance.

PayPal dominates this payment processing industry and should look after and recognize when their customers are stolen from.

I continue you dispute this situation with PayPal and am extremely disappointed with their actions and have lost a considerable amount of trust with this company.

Company response to consumer: Closed with monetary relief