Consumer complaint received 2025-08-06 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: TX

Complaint narrative:
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XX/XX/XXXX Complaint Against : PayPal , Inc . 


Failure by PayPal to Protect Against Unauthorized Transaction and Improper Denial of Dispute/Appeal Summary of Complaint : On XX/XX/XXXX, an unauthorized transaction occurred through my PayPal Business account totaling {$1000.00}. This transaction was not initiated, authorized, or approved by me or any individual associated with my business. 

Upon discovering the charge, I filed a dispute through XXXX XXXX XXXX. Despite clearly indicating that the transaction was unauthorized, PayPal denied my dispute. I appealed the decision, but the appeal was also denied without a clear explanation or due consideration of the evidence I provided. 

Violation of Federal Law : PayPals handling of this incident may constitute a violation of consumer protections under Regulation XXXX and related statutes that govern unauthorized electronic fund transfers ( EFTs ), including : Electronic Fund Transfer Act ( EFTA ), 15 U.S. Code 1693 et seq.

15 U.S. Code 1693g limits a consumers liability for unauthorized transactions. 

If a consumer reports an unauthorized transfer in a timely manner, the liability is typically limited to {$50.00}, and in some cases, {$0.00}. 

PayPal, as a money transmitter, is required to investigate such claims fairly and promptly. 

Relevant Case Law : XXXX XXXX PayPal, XXXX, XXXX XXXX XXXX ( XXXX  XXXX. XXXX ) Although not binding federal precedent, this case involved PayPal 's failure to adequately investigate a disputed charge and highlighted their responsibilities under consumer protection laws. 

XXXX XXXX  PayPal XXXX XXXX, XXXX. XXXX ( XXXX. XXXX. XXXX ) This case included allegations that PayPal failed to investigate unauthorized activity and breached its contractual and regulatory obligations. 

Note : While EFTA primarily applies to consumer accounts, the Federal Trade Commission ( FTC ) and CFPB still expect financial service providers to follow fair dispute resolution practices, even for business accounts, under Unfair or Deceptive Acts or Practices ( UDAP ) standards. 

Failure of Duty of Care : As a financial services provider, PayPal owes a duty of care to its users to : Provide a secure platform ; Respond promptly and fairly to disputes ; Investigate claims of unauthorized access diligently. 

By denying my dispute without properly investigating or considering clear evidence, PayPal may have breached this duty. 

Requested Resolution : A full refund of the disputed, unauthorized charge : {$1000.00} A thorough and transparent re-investigation of the dispute and appeal. 

A commitment from PayPal to improve its dispute resolution process for business accounts, particularly where fraud or unauthorized use is claimed. 

Conclusion : As a small business, this loss is significant. I am extremely dissatisfied with how PayPal has handled this matter and the lack of meaningful appeal process. I respectfully request that regulators investigate this issue and compel PayPal to resolve it properly. 

I am prepared to escalate this matter further, including to state attorneys general, filing formal complaints with the FTC, or initiating small claims proceedings if necessary. 

Sincerely, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

Company response to consumer: Closed with explanation