Consumer complaint received 2026-01-23 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:
Since XXXXXXXX I have maintained PayPal Credit as my default payment method for XXXX reservations through my PayPal account. On XX/XX/XXXX, I discovered that PayPal had changed my payment method from PayPal Credit to instant bank transfer without my authorization, notification, or consent. 

Timeline of Events : - XXXX XXXX : Successfully used PayPal Credit for all XXXX transactions XXXX XX/XX/XXXX : Discovered payments were being processed as instant bank transfers from my checking account instead of PayPal Credit XXXX XXXX XXXX XXXX XXXX Contacted both PayPal customer service and XXXX support PayPal Response XXXX Was told the issue may be related to PayPal 's transition from virtual PayPal Credit to a physical card, but no solution was provided XXXX Response : Acknowledged the issue but did not resolve it Resolution : Neither company resolved the unauthorized payment method change Evidence This is a Systemic Problem : Through my own research, I discovered this is not an isolated incident but a widespread problem affecting multiple PayPal users. On the XXXX XXXX forum, multiple users posted in XX/XX/XXXX reporting identical unauthorized payment method changes : - " YES, this has happened to me twice in the past month. After it happened the first time, I checked settings in PayPal and XXXX, all looked fine, and then it happened again today!!!! '' - " Had this exact same issue today, which has now cost me overdrawn fees with my bank. '' - " This problem has happened with several recent PayPal transactions, including recurring subscriptions that had only ever been charged to credit card now being charged to bank. '' Source : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX Connection to PayPal Product Changes : PayPal 's own press release dated XX/XX/XXXX, announced the rollout of a physical PayPal Credit card, transitioning from the previous virtual-only credit line : " The physical card will be rolling out in the coming weeks to US customers. '' Source : XXXXXXXX XXXX XXXXXXXX The timing of this product rollout directly correlates with when multiple users experienced unauthorized payment method changes. It appears PayPal 's system update to accommodate the physical card disrupted automatic payment subscriptions without proper user notification, authorization, or consent. 

Why This is a Serious Consumer Protection Issue : - No Authorization : Payment methods were changed without user consent - No Notification : Users were not informed of changes to their accounts- Financial Risk : This created risk of overdraft fees, NSF charges, and financial disruption - Breach of Trust : Users specifically selected PayPal Credit for financial planning purposes- Widespread Impact : Multiple users affected, suggesting systemic failure - Violation of User Agreement : PayPal 's own terms require notification of material account changes Company Response : Both PayPal and XXXX acknowledged the issue but failed to : - Restore my original payment method settings- Provide written explanation of what happened - Offer compensation for the disruption - Commit to preventing this from happening again - Address the systemic nature of the problem This unauthorized change put me at significant financial risk and violated my established payment preferences that had been in place for over XXXX  years.

Company response to consumer: Closed with monetary relief