Consumer complaint received 2026-01-23 00:00:00
Product: Checking or savings account — Checking account
Issue: Managing an account — Problem using a debit or ATM card
Company: Paypal Holdings, Inc
State: PA

Complaint narrative:
I am filing this complaint regarding PayPals handling of unauthorized electronic fund transfers and its refusal to issue refunds after the merchant failed to respond within the required dispute deadline. 

XXXX XXXX XXXX XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX  XX/XX/year> XXXX XXXX XXXX I formally opened an XXXX  * unauthorized transaction dispute XXXX XXXX with PayPal for XXXX  * 41 transactions totaling {$510.00} * *. 

* The transactions consisted of : XXXX XXXX XXXX XXXX PayPal XXXXXXXX XXXX transactions totaling {$340.00} XXXX XXXX XXXX XXXX XXXX XXXX PayPal Balance transactions totaling {$100.00} XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  transactions totaling {$55.00} * * * * * XXXX XXXXXXXX XXXX XXXX transaction totaling {$3.00} XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX rewards points transaction totaling {$9.00} XXXX XXXX XXXX PayPal confirmed in writing through my Message Center that : XXXX The seller is required to respond to the dispute by XX/XX/year> to prevent the case from being decided in your favor. 

XXXX PayPal further stated that although the unauthorized account-activity case had been denied, the * * charge dispute itself remained open * * and would be resolved after the merchant response period.

XXXX XXXX XXXX XXXX XXXX XXXX XXXX Improper Early Denial XXXX XXXX On XXXX XXXX XXXX XXXX XXXX XXXX XXXX before the merchant response deadline had expired, PayPal sent an email stating : > Weve completed our review and found the transactions consistent with your PayPal transaction history. 

PayPal relied solely on internal data such as IP address consistency and transaction history and did * * not * * cite any merchant-provided evidence.

This does not meet the CFPBs definition of a * * reasonable investigation * * under Regulation E.

XXXX XXXX XXXX XXXX XXXX XXXX XXXX  Merchant Non-Response XXXX XXXX The merchant * * did not respond * * by the stated deadline of XXXX XXXX XXXX XXXX XXXX XXXX XXXX. 

Under PayPals own written notice, the dispute should have been * * decided in my favor automatically * *. 

However : * No refund was issued * No credit was applied * No written explanation was provided Instead, PayPal representatives repeatedly gave conflicting explanations.

Multiple PayPal representatives incorrectly stated that : * The merchant had responded ( later admitting this was false ), or * PayPal could deny the claim using its own internal data despite merchant non-response.

-- - # # # * * Improper Reclassification Without Consent * * After the merchant deadline passed, PayPal : * * * Reopened my case without my consent XXXX XXXX XXXX XXXX XXXX Reclassified the dispute as Buyer Protection XXXX XXXX XXXX XXXX XXXX Limited the reopened case to less than {$100.00} of the {$510.00} total XXXX XXXX XXXX  Attempted to restart investigation timelines I did not authorize this change. 

This reclassification appears designed to avoid PayPals reimbursement obligation after merchant default.

Buyer Protection is a discretionary PayPal program and does not replace federal consumer protections under Regulation E.

XXXX XXXX XXXX XXXX XXXX XXXX XXXX Key Violations XXXX XXXX XXXX has engaged in the following conduct : * Failed to issue refunds after merchant non-response * Conducted an unreasonable investigation relying solely on internal data * Denied unauthorized transactions without merchant evidence * Ignored its own written merchant-response deadline * Reclassified the dispute without consumer consent * Split and reduced the disputed amount after default * Attempted to restart timelines to avoid reimbursement * Failed to honor debit card protections associated with the PayPal Debit XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Why These Transactions Are Unauthorized * * The transactions were induced through * * fraudulent misrepresentation by the merchant XXXX XXXX  which invalidates authorization under CFPB Regulation E guidance. 

Authorization obtained through deception is not valid authorization. 

XXXX XXXX XXXX XXXX XXXX XXXX XXXX Harm to Consumer * * As a result of PayPals actions : * I have been deprived of {$510.00} in funds * I have spent dozens of hours on the phone with PayPal XXXX  I have received contradictory and misleading information * I have been denied the default outcome after merchant non-response XXXX XXXX XXXX XXXX XXXX XXXX XXXX Requested Resolution XXXX XXXX  I am requesting that PayPal be required to : 1. * * Immediately refund the full {$510.00} * * in disputed transactions 2. Cease reclassifying disputes without consumer consent 3. Honor merchant-response deadlines communicated to consumers 4. Correct internal procedures that substitute PayPal data for merchant evidence XXXX XXXX XXXX XXXX XXXX XXXX XXXX Supporting Documentation Available Upon Request XXXX XXXX XXXX PayPal Message Center confirmation of merchant response deadline * Email denying unauthorized claim prior to deadline * Screenshots showing merchant non-response * Transaction list and amounts * Call logs and dispute records -- - * * I certify that the information above is true and accurate to the best of my knowledge. XXXX XXXX

Company response to consumer: Closed with explanation