Consumer complaint received 2026-02-20 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:
On XX/XX/XXXX, an unauthorized transaction occurred on my PayPal account from a company named XXXX. This transaction was fraudulent, as I did not order or authorize it. Someone fraudulently used my PayPal account, charging {$1000.00} for a pair of shoes, which were shipped to XXXX. PayPal authorized the charge and withdrew the funds from my Bank XXXX XXXX account on XX/XX/XXXX. I immediately filed a claim with PayPal regarding this incident. On XX/XX/XXXX, PayPal closed the case in favor of the merchant, stating, " Thank you for reporting this case. After our review, we found that certain transactions were authorized. '' On XX/XX/XXXX, I initiated a claim with PayPal regarding unauthorized transactions. The PayPal log indicated the case was closed in my favor on the same day, with a message stating refunds had been initiated. However, the funds were not credited to my account until XX/XX/XXXX. After contacting PayPal again on XX/XX/XXXX, they reopened the case and contacted the merchant, XXXX. On XX/XX/XXXX, I received {$1000.00} credit to my checking account from PayPal. 

As a standard procedure for card fraud, I also notified my bank, Bank XXXX XXXX, on XX/XX/XXXX. On XX/XX/XXXX, Bank XXXX XXXX issued a separate credit adjustment of {$1000.00} to my account. Consequently, I now have XXXX credits of {$1000.00} each in my checking account, XXXX from PayPal and XXXX from Bank XXXX XXXX. 
Following the resolution of the fraudulent activity, I took the necessary steps to re-enable my PayPal account, including resetting my password, verifying my identity, implementing additional Multi-Factor Authentication ( MFA ), and rectifying the negative balance. On XX/XX/XXXX, I transferred funds back into my PayPal account to achieve a XXXX balance, restoring both my accounts to their pre-fraudulent activity status. 

However, on XX/XX/XXXX, I received notification from PayPal indicating a reversal of the initial claim. Consequently, a negative balance of - {$1000.00} has been reinstated, and PayPal is now asserting this as a debt requiring repayment. 
I contacted PayPal again regarding a fraudulent transaction of {$1000.00} authorized on my account. PayPal initially reversed the charge after I notified my bank. However, they subsequently reversed the reversal, citing their policy which states that notifying the bank about the fraud necessitates closing the claim. Consequently, I am now being held liable for the fraudulent amount. 

My initial contact with PayPal occurred on XX/XX/XXXX, and I contacted them again on XX/XX/XXXX. Despite these communications, PayPal maintains that my account has a negative balance of - {$1000.00}, and I am responsible for the payment. On XX/XX/XXXX, due to their insistence, I made a payment of {$100.00}. 

PayPal has refused to reopen the case or initiate a new one, despite the unauthorized nature of the transaction. I believe I am entitled to protection from fraudulent activity, and I request that PayPal reverse the debit and eliminate the negative balance. 
I have been a loyal PayPal customer for 26 years. Despite my attempts to resolve a fraudulent charge, PayPal has refused to help, stating I have no recourse. I am now seeking alternative methods to address this issue. I am concerned that PayPal may report this to credit bureaus as an outstanding debt, negatively impacting my credit score.

Company response to consumer: Closed with explanation