Consumer complaint received 2025-06-28 00:00:00
Product: Debt collection — Credit card debt
Issue: Attempts to collect debt not owed — Debt is not yours
Company: Paypal Holdings, Inc
State: IL

Complaint narrative:
Subject : Detailed Summary of FTC XXXX Refund Issue Request for Escalation ( XXXX XXXX ) Name : XXXX XXXX Email Associated with PayPal : XXXX Refund Amount : {$80.00} USD Refund Issued Date : XX/XX/year> Platform : PayPal Age : Minor Concern : Refund not received due to prior negative balance deduction Dear Support Team, I am writing to provide a full, detailed summary regarding my ongoing issue with the {$80.00} FTC XXXX settlement refund, which I, XXXX XXXX, was supposed to receive on XX/XX/year>, through my PayPal account ( linked to XXXX ). 

This refund was part of the Federal Trade Commissions government settlement with XXXX XXXX for unauthorized XXXX charges that affected many users, including minors like myself. The purpose of the refund was to return money for in-game charges that were not fully authorized or understood due to my age at the time. It was meant as a resolution for those impacted, and receiving it in full is very important to me. 

Unfortunately, despite the refund being issued, I never actually received the {$80.00} in spendable funds. After multiple follow-ups with customer support, I was informed that the refund was automatically applied to a negative balance on my PayPal account XXXX This outcome is deeply upsetting and confusing, especially since : The refund was meant to compensate me for unauthorized activity as a minor. 
I had no control or full understanding over the previous PayPal transactions that led to the negative balance. 
I was not given a choice or notice before the refund was redirected. 
I no longer have access to the original account the refund was deposited into and was seeking reissuance to a new PayPal-linked bank account. 

Here is a breakdown of the timeline based on your support teams response and my own records : Timeline : XX/XX/year> : A {$110.00} USD payment from an individual named XXXX XXXX was deposited into my PayPal account. 
That amount was later disputed, and the case was resolved in the senders favor, causing a negative balance in my account totaling {$120.00}, which included dispute fees. 
XX/XX/year> : The {$80.00} FTC refund was deposited into my PayPal account. 
However, since my PayPal balance was negative at the time, that refund was automatically applied to cover part of the negative amount. 
I was then informed by PayPal Support ( agent XXXX ) that my account still shows a remaining negative balance of {$40.00} after the refund was absorbed.

Why Im Requesting Escalation : This situation is extremely frustrating and unfair. The refund I was issued is tied to a government settlement designed to protect minors and offer financial restitution for charges that should never have happened in the first place. It should not have been subject to automatic deductions for unrelated account activityespecially without prior notice or consent. 

I believe this matter deserves further review because : I am a minor, and the original transaction and subsequent issues occurred under conditions I could not fully manage or understand. 
The refund served a specific legal purpose and should not be treated the same as a regular PayPal deposit. 
I was never notified that the refund would be absorbed, nor given an opportunity to dispute it or redirect it. 
I have repeatedly asked for the refund to be reissued to a new PayPal-linked bank account, which I now use and have access to.

What I Am Requesting : I kindly ask that this case be escalated to a supervisor or higher-level support specialist for further investigation. Spe
cifically, I am requesting : 1. A reissuance of the {$80.00} refund to my new PayPal-linked account or another acceptable payment method.

2. A reconsideration of the decision to absorb the FTC refund into the negative balance, given the unique and legal nature of the payment.

3. Clarification on how refunds from government settlements are handled in cases involving minors with disputed activity.

I would be incredibly grateful for your help in resolving this matter fairly. The money was meant to correct a mistake that affected me as a child, and having it taken again due to unrelated technicalities feels unjust. 

Please let me know if you need any additional verification or documentation. I am happy to cooperate in any way necessary to have this resolved properly. 

Thank you again for your time, support, and understanding. 

Sincerely, XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation