Consumer complaint received 2025-08-30 00:00:00
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Confusing or missing disclosures — 
Company: Paypal Holdings, Inc
State: MS

Complaint narrative:
Background I have been a PayPal customer for well over a year. During that time, I have received hundreds of dollars in payments through the platform. My account history has been clean : I have never had a chargeback, dispute, or fraud issue. I have operated as a loyal, rule-abiding customer.

Despite this, my PayPal account wa
s recently permanently disabled without warning, resulting in significant financial losses to my business and personal livelihood. 


-- - Events Leading to Closure 1. Returned Payments ( XX/XX/year> ) On a single day, seven payments sent to me by legitimate customers were reversed and returned without justification. These were payments for services I had already provided. 

I contacted PayPal multiple times for clarification and received conflicting explanations : On my first call, I was told it was an internal error and the payments should not have been released. 

On a second call, I was told PayPal had fronted the money on behalf of senders who did not have verified accounts or linked banks, and then reversed the transactions when they could not recover the funds. This is not a reasonable practice and unfairly punishes small business owners. 

On my final call, an agent reviewed my account and confirmed there was nothing wrong with my account and that the listed reason for closure did not actually apply to me.

I have recordings of these calls which demonstrate PayPal provided at least three different, conflicting reasons for the same issue. 


2. Permanent Account Disablement ( XX/XX/year> ) After escalating my concerns by phone and email ( including to PayPals Executive Office ), my account was permanently disabled without specific cause. The timing suggests this was retaliatory because the closure came only after I pushed back against their handling of the returned payments. 




-- - Policy Issues Multiple Accounts : I later learned I had multiple PayPal accounts, which is apparently against their rules. Like most consumers, I clicked Accept without reading every line of the terms. At no point did PayPal warn me or give me the opportunity to correct this. If that was the real issue, they could have easily required me to consolidate or close duplicates.

Incorrect Social Security Number : PayPal also had my Social Security number entered incorrectly ( a mistyped digit ). I corrected this immediately when I noticed, but the fact remains that PayPal allowed me to use their platform and receive payments under an invalid SSN for over a year. This raises serious concerns about their compliance with Know Your Customer ( KYC ) laws and other federal financial regulations.

-- - Damages Because of PayPals actions : I have lost hundreds of dollars in completed payments for services rendered.

I have lost access to future payments from customers, many of whom only use PayPal.

I have suffered financial hardship, reputational harm, and emotional distress.

-- - Why This Matters I believe PayPal has acted : 1. Unfairly Closing my account despite a clean record.

2. Negligently Allowing transactions for over a year under an incorrect SSN.

3. Retaliatorily Disabling my account only after I raised complaints and asked for accountability.

-- - Requested Action I respectfully request : 1. A full investigation into PayPals handling of my account.

2. Restoration of my account access OR a fair opportunity to correct any alleged violations.

3. Compensation or restitution for the financial losses caused by reversed payments and improper closure.

4. Review of PayPals practices regarding : Giving customers multiple conflicting explanations.

Reversing legitimate payments under questionable fronting policies.

Failing to properly verify Social Security numbers at account setup.

-- - Closing I previously worked as a XXXX XXXX supervisor in the credit card department, so I am knowledgeable about consumer protection, fraud prevention, and compliance requirements. In my view, PayPals actions have not only harmed me directly but also raise serious compliance concerns that deserve regulatory review.

Respectfully, XXXX XXXX

Company response to consumer: Closed with explanation