Consumer complaint received 2026-03-19 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc
State: OR

Complaint narrative:
XXXX XXXX XXXX XXXX SUMMARY : I was the victim of a law-enforcement impersonation scam and sent {$13000.00} through PayPal. I reported the fraud to PayPal within hours, and my bank stopped the XXXX transfer as part of the dispute process. XXXX current position is that because the transaction did not complete, there is no transaction to dispute, but they are still holding me responsible for the {$13000.00} they advanced and have sent the balance to collections. This creates a situation where I am being held liable for a fraud-induced payment that PayPal acknowledges XXXX not be disputed through their system. DETAILED REPORT : I was targeted by scammers impersonating the Sheriff 's department at XXXX am on XX/XX/year> by phone. They did not call from a spoofed number originally, but later spoofed a number when I became suspicious, which I verified online as affiliated with my local police department. I sent XXXX payments of {$6500.00} for a total of {$13000.00} as " bail '' ( for a missed jury summons -- something I had actually missed recently ) that was ostensibly to be returned to me after going to the courthouse to " clear this up. '' After I sent the money via PayPal, the scammer told me they had canceled the PayPal payment because it wasn't clearing fast enough, and insisted I withdraw the money in cash to put it in a " remote bail deposit box '' which turned out to be a bitcoin machine in a liquor store. I found out it was a scam just before XXXX upon arrival to the liquor store and the cashier 's immediate intervention ( sometime around XXXX pm ), XX/XX/year>. I called PayPal at XXXX pm to inform them I had been scammed and find out what to do. They informed me I needed to open a " chargeback case '' which was " guaranteed '' ( their word ) to return my money to me, which I needed to initiate through my bank XXXX University XXXX Wisconsin XXXX XXXX ( XXXX ) ). My bank was already closed ( it is located XXXX hours later in Wisconsin ). I filed a police report with the XXXX Police Department that night ( case number XXXX ). I called my bank the next morning at XXXX am ( my time ) and alerted them about the scam and asked them to initiate a chargeback case on my behalf. My bank had never heard of a " chargeback case '' and I went back and forth between them and PayPal to eventually find out that " chargeback '' simply meant to file a dispute with my bank. ( The chargeback case is what they told me allows PayPal to pursue getting the money back from the scammer. ) My final call with my bank that day ( a XXXX minute call at XXXX ) was when I filed the dispute. As a standard part of the dispute process with XXXX, we put a " stop payment '' on XXXX draws from PayPal. When I spoke with my bank, my account was {$12000.00} negative because I had only had something like $ XXXX in my checking when I sent the money via PayPal, and then withdrew {$13000.00} in cash later that day. My bank sent me a secure message that my dispute had been successful timestamped at XXXX ( I am unclear if the timestamp is my local time of XXXX XXXX or XXXX XXXX XXXX from Wisconsin XXXX and the money returned to my account, taking me positive. I called PayPal on XX/XX/XXXX and spoke with an agent who told me she was with the fraud department at PayPal and that I had a fraud case open at PayPal. She said if I hadn't heard within XXXX hours, I was allowed to call them back but that the process can take a long time. She also advised I file a complaint with XXXX ( which I did, as well as with the FTC, both on XX/XX/XXXX. FTC Report number : XXXX, XXXX Submission ID : XXXX ). I did not call PayPal again until XX/XX/year>. At this time I spoke with an agent named XXXX who told me that there was no fraud case open at PayPal, as my bank had not initiated the chargeback case. He said I would know if I had a fraud case because I would have a reference number starting with " PP-. '' I spent a long time on the phone with XXXX and called my bank with him on the line to try to force the institutions to talk to each other and figure out where the crossed wires were, but XXXX policy doesn't allow representatives to discuss anything with a third party on the line. After getting off the phone with XXXX, I called XXXX again and spoke with a representative who said that the dispute was successful and that the information should be on its way to PayPal as part of that process. I called PayPal on Tuesday XX/XX/XXXX and spoke with an agent named XXXX. I asked XXXX to read my notes from my conversation with XXXX and the representative prior to him. She confirmed that XXXX 's information -- that there is no fraud case -- was correct but said that no agent had documented telling me that there is a fraud case the phone call prior to that. Eventually that call escalated to reach XXXX, a supervisor at PayPal 's call center. I spoke at length with XXXX and she finally uncovered for me that, because my bank had put a " stop payment '' on the XXXX from PayPal before the money XXXX from my account, the case did not enter into the chargeback system. As such, she told me, there was nothing I could do via PayPal, that I owed PayPal {$13000.00}, and that maybe I should try taking the scammer to small claims court. The next day on XX/XX/XXXX timestamped at XXXX am, I received an email from PayPal subject line, " Reminder : We need some information regarding your PayPal account. ( Ref ID - XXXX ). '' The message said, " We noticed some unusual activity in your account and hence we'll require you to confirm some information. '' I called PayPal at XXXX am on XX/XX/XXXX and spoke with an agent named XXXX to ask if " XXXX '' was my case number. She told me, " rest assured that it's not about a fraud case in your account... it's about the negative balance in your account. '' I also received a call from PayPal collections at XXXX asking me to pay for my negative balance of {$13000.00}. I informed them that this was the result of a law enforcement impersonation scam and that I do not believe myself to be accountable for that money. This was the last interaction I have had with PayPal to this date.

Company response to consumer: Closed with non-monetary relief