Consumer complaint received 2026-01-02 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: TX

Complaint narrative:
CFPB Complaint PayPal , Inc . 

Product : Money transfer / payment service Issue : Failure to comply with Regulation E dispute requirements ; unfair, deceptive, and retaliatory practices Enforcement-Style Complaint Narrative PayPal, Inc. engaged in unfair and deceptive acts or practices and failed to comply with the Electronic Fund Transfer Act ( EFTA ) and Regulation E ( 12 C.F.R. Part 1005 ) in its handling of my disputes.

PayPal approved my initial dispute in my favor, determining that the transaction qualified for relief under its dispute standards. The transaction involved digital goods purchased through online applications that used deceptive and misleading advertising. This approval established that the error claim was valid.

I subsequently submitted additional error claims that were materially identical to the approved dispute, involving the same type of electronic fund transfers, the same category of merchants, and the same factual basis. Despite no material differences, PayPal denied all subsequent disputes without identifying new facts, evidence, or a lawful basis for disparate treatment. 

During the investigation process, PayPal awarded the first dispute in my favor. Then denied every subsequent dispute. I called them and was told that he would be able to reverse the denials and that I would be awarded my disputes just like the first case. Instead of honoring those representations, PayPal transferred me to a different person who then said they would be happy to process my refunds except I had a limitation on my account. Then they denied the claims, and suspended my account. Suspending an account after protected dispute activityparticularly after representing that claims would be resolved in the consumers favorappears retaliatory and inconsistent with good-faith dispute investigation requirements.

Further, PayPal failed to comply with Regulation E investigation and crediting requirements, including but not limited to : 12 C.F.R. 1005.11 ( c ) : Failure to conduct a good-faith investigation of reported errors, as evidenced by inconsistent outcomes for identical claims and lack of reasoned explanations.

12 C.F.R. 1005.11 ( c ) ( 2 ) : Failure to provisionally credit disputed amounts when investigations were not completed within ten ( 10 ) business days.

12 C.F.R. 1005.11 ( d ) : Failure to provide adequate written explanations supported by evidence when denying error claims.

12 C.F.R. 1005.11 ( b ) ( 1 ) : Improper handling of valid error notices involving electronic fund transfers.

PayPals conduct deprived me of access to funds, relied on misleading representations regarding dispute outcomes, and imposed account restrictions following lawful dispute activity. These actions caused financial harm and undermine the consumer protections guaranteed under the EFTA and Regulation E.

Consumer Harm Financial loss from improperly denied error claims Reliance on misleading representations that disputes would be resolved in my favor Administrative and financial burden resulting from noncompliant dispute handling

Company response to consumer: Closed with explanation