Consumer complaint received 2026-06-01 00:00:00
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Other transaction problem — 
Company: Paypal Holdings, Inc
State: MD

Complaint narrative:
I am filing this complaint against PayPal regarding the continued withholding of funds belonging to my organization, XXXX, a registered XXXX ( c ) ( XXXX ) nonprofit organization and small business. On XX/XX/XXXX, our organization received a legitimate payment in the amount of {$8900.00} from the XXXX XXXX XXXX and XXXX XXXX XXXX XXXX ), a government agency and long-standing client. As of the date of this complaint, PayPal continues to hold these funds without providing a reasonable explanation, despite our full compliance with every request they have made. Over the past XXXX months, PayPal has repeatedly requested documentation from our organization. We have provided : Government-issued identification, including a driver 's license and passport Business verification documentation Confirmation of our nonprofit status Additional information requested by PayPal 's XXXX team Furthermore, at PayPal 's request, our client, the XXXX XXXX XXXX XXXX XXXX XXXX XXXX verified on XXXX separate occasions via email that the payment was legitimate and authorized. This is not a new business relationship with PayPal. In XXXX, our organization completed extensive business verification requirements and successfully processed multiple transactions through the platform. PayPal has already established that XXXX XXXX XXXX is a legitimate organization operating in good standing. Despite this, we continue to receive the same scripted responses from PayPal representatives, who repeatedly promise updates within " XXXX to XXXX hours. '' These promises have proven to be meaningless, as no resolution has ever followed. Most concerning was a recent conversation with a PayPal representative identified as XXXX. During that conversation, I was informed, in substance, that PayPal had decided it no longer wished to do business with our company and that we should " check back in XXXX months '' for the funds to be released or potentially returned to the payer. This response is unacceptable. PayPal is currently withholding {$8900.00} that rightfully belongs to our organization despite : XXXX. Verification of our identity. XXXX. Verification of our nonprofit status. XXXX. Verification of our business operations. XXXX. Verification by the government agency that sent the payment. XXXX. More than XXXX months of cooperation with every PayPal request. The financial impact on our organization has been significant. Because PayPal continues to withhold these funds, we were forced to borrow money to fulfill obligations associated with the event and services we provided to our client. This situation has created unnecessary financial hardship and has damaged our organization 's reputation by creating the appearance that we are unable to access funds earned through legitimate business operations. I am deeply concerned that PayPal 's practices disproportionately affect small businesses and nonprofit organizations that lack the resources to challenge prolonged fund holds. A review of publicly available complaints reveals numerous similar allegations from other small businesses whose funds have been frozen for extended periods despite providing requested documentation. I am requesting the CFBP 's assistance in obtaining : Immediate release of the {$8900.00} being held by PayPal. A written explanation detailing the specific reason for the continued hold. A review of PayPal 's handling of this matter and its treatment of small business and nonprofit accounts. No company should be permitted to indefinitely hold verified funds from a legitimate nonprofit organization after all requested documentation has been provided and independently verified.

Company response to consumer: Closed with non-monetary relief