Consumer complaint received 2025-05-19 00:00:00
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc
State: NJ

Complaint narrative:
To Whom It May Concern : My name is XXXX XXXX, and I am submitting this formal complaint against PayPal , Inc. regarding a highly unfair and financially damaging transaction dispute in which I, as a seller, was deprived of both payment and property with no recourse provided and no protection under PayPals Seller Protection policy, which was revoked without proper cause. 

Background : Date of Sale : XX/XX/XXXX Item Sold : A custom-built musical instrument ( guitar ) Amount : {$740.00} USD Buyer : [ Buyer 's Name, if known ] Platform : Direct sale, payment made via PayPal Shipping Confirmed XXXX XX/XX/XXXX Item Received by Buyer : XX/XX/XXXX I provided the buyer with full disclosure of the item, including high-resolution photos and video footage showing the instrument being played, ensuring the buyer knew exactly what they were receiving. The buyer received the item, then immediately filed a dispute on XX/XX/XXXX, claiming the guitar was a " XXXX product '' and not a XXXX-built custom item which is categorically false. The instrument I sold was built in XXXX, long before the emergence of any overseas replicas. 

PayPal sided with the buyer and refunded them the {$740.00}. Critically, PayPal did not require the buyer to return the item. I now have neither my property nor the funds I am owed effectively resulting in theft, facilitated and enforced by PayPals system.

Compounding this issue, PayPal simultaneously and arbitrarily limited my account, alleging high risk due to shared account information with other accounts ( which I dispute ). As a result, they stripped me of Seller Protection eligibility after I had already completed the transaction and fulfilled every obligation as a seller. 

Efforts to Resolve : I provided proof of shipping, documentation of the sale, and a police report ( which I filed after the buyer refused to return the item ). 

I submitted multiple appeals through PayPals channels.

I contacted PayPal 's Office of Executive Escalation and received responses confirming that they would not change their decision. 

I also contacted the XXXX XXXX XXXX PayPal responded but stood by their decision. 

Unfair Treatment and Financial Loss : I upheld all obligations as a seller. 

The buyer filed a baseless claim and was rewarded with both the item and a full refund. 

PayPal denied me any form of protection or restitution, citing risk-level claims unrelated to this transaction. 

My account has since been permanently limited, despite providing all documentation requested. 

Relief Requested : I respectfully request that PayPal be required to : Reimburse me the {$740.00} I am owed for the item, or recover the item from the buyer.

Explain why the buyer was allowed to keep the item without returning it.

Clarify why Seller Protection was revoked retroactively and how this aligns with fair trade practices. 

Re-evaluate the arbitrary limitation placed on my account or provide transparency about the data used to make that determination. 

I believe PayPal failed to apply their User Agreement fairly, allowed a buyer to exploit the system, and failed to protect me from an evident case of abuse or fraud. Their refusal to review the matter further only exacerbates the harm caused. 

Please contact me if further documentation is needed, including the police report, correspondence with PayPal, or shipping evidence. 

Thank you for your time and assistance. 

Sincerely, XXXX XXXX XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation