Consumer complaint received 2025-03-12 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem — 
Company: Paypal Holdings, Inc
State: IL

Complaint narrative:
Subject : Fraudulent Use of My PayPal Account Lack of Resolution & IRS Reporting Issue To Whom It May Concern, I am writing to formally complain about PayPals gross negligence in handling fraud on my business account, its failure to protect consumers, and its refusal to correct a serious tax issue caused by this fraud.

Several months ago, a bad actor hacked into my dormant PayPal business account and locked me out. They then used my business name and email to set up a fraudulent payment XXXX, scamming customers through various e-commerce websites. These fraudulent transactions totaled over $ XXXX conducted without my knowledge or consent. 

How PayPal Failed to Prevent Fraud & Protect Me 1. Failure to Detect Suspicious Activity My account had been inactive, yet PayPal allowed an unauthorized party to process tens of thousands of dollars in transactions under my business name with no verification or security measures. 
2. I Was Locked Out The fraudsters took over my account, and I had to fight to regain control.

3. Lack of Action to Shut It Down I worked with PayPal to close the account, yet PayPal failed to stop these fraudulent activities in a timely manner.

4. Terrible Customer Support I have called PayPal at least six times, and each time, Ive had to start from scratch because PayPal agents act as if they have no idea what my case is about.

5. No Help for Fraud Victims I had to personally email over 100 people to notify them they were scammed. PayPal took no responsibility and provided no assistance to the victims. 

IRS Tax Nightmare PayPal Sticking Me With a Fraudulent $ XXXX XXXX XXXX To make matters worse, PayPal issued me a XXXX for the {$60000.00} in fraudulent transactions, falsely attributing these earnings to my business. I disputed this with PayPal multiple times, and I was repeatedly assured that they would fix it. 

Yet, despite my efforts, PayPal later denied my dispute and refused to issue a corrected XXXX to the IRS. Now, I am facing an IRS tax liability for money I never received, from fraudulent transactions that PayPal enabled and failed to prevent. 

What I Need PayPal to Do Immediately XXXX. Issue a Corrected XXXX to the IRS I do not owe taxes on {$60000.00} in fraud and will not accept being penalized due to PayPals negligence. 
2. Provide Formal Documentation Acknowledging the Fraud I need official documentation stating that my account was compromised and that these transactions were unauthorized.

3. Improve Fraud Prevention & Support PayPals handling of fraud cases like mine is appalling. The fact that multiple victims were scammed under my business name without PayPal taking swift action is unacceptable. 

PayPals failure to protect my business, its refusal to issue proper tax documentation, and its complete lack of accountability is disgraceful. I will be escalating this complaint to all available consumer protection agencies, financial regulators, and media outlets if this is not addressed immediately. 

This complaint is being submitted to : XXXX XXXX XXXX XXXX XXXX XXXX Federal Trade Commission ( FTC XXXX Consumer Financial Protection Bureau ( CFPB ) IRS ( if necessary ) Various consumer advocacy groups and legal advisors Additionally, I will be making this issue public on social media to warn others about PayPals negligence.

Company response to consumer: Closed with explanation