Consumer complaint received 2026-05-17 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc
State: KY

Complaint narrative:
On XX/XX/year>, four unauthorized {$500.00} payments totaling {$2000.00} were processed through my PayPal account to XXXX XXXX XXXX XXXX ( the legal registered name for XXXX ), case ID XXXX . The seller email associated with these transactions was XXXX. I was the victim of a sophisticated social engineering phishing scam through a fraudulent website impersonating XXXX ( XXXX ). This domain was only 4 days old at the time of the fraud and contained a unique tracking ID in the URL ( XXXX ) indicating I was specifically targeted. The fraudulent site has since been shut down by XXXX following my abuse report. I reported the fraud to PayPal immediately on XX/XX/year>, the same day it occurred. PayPal closed my case on XX/XX/year> stating the transactions were authorized. However I never authorized any preapproved payment agreement with XXXX. I have never held a XXXX account. These payments funded someone elses cryptocurrency account without my knowledge or consent. The scammer used my PayPal credentials obtained through phishing to set up preapproved payments and drain my account. PayPal failed to protect me in the following ways : First, four identical {$500.00} payments to a cryptocurrency merchant in a single day is textbook fraud behavior that industry-standard fraud detection systems are specifically designed to catch. PayPal failed to flag this completely anomalous transaction pattern. Second, I had zero prior cryptocurrency transaction history on my PayPal account. A first-time payment to a crypto merchant should have triggered additional verification. It did not. Third, the payments were set up as Preapproved Payments an authorization I never knowingly granted. PayPal failed to alert me that a preapproved payment agreement had been established on my account. Fourth, PayPal sent no fraud alert, warning, or request for additional verification before processing {$2000.00} in cryptocurrency payments that were completely outside my normal transaction behavior. I have taken the following actions to document this fraud : Filed a complaint with the FBI Internet Crime Complaint Center ( IC3 ) Filed a CFPB complaint against XXXX for a related {$500.00} fraudulent transaction Reported the fraudulent website to XXXX, which resulted in the site being taken down Closed and replaced my compromised bank account Reported my Kentucky drivers license as compromised and am obtaining a new license number Enrolled in XXXX XXXX monitoring The same scam operation stole {$500.00} through XXXX and {$2000.00} through PayPal on the same day totaling {$2500.00} in losses all sent to the same recipient, XXXX XXXX XXXX XXXX . This coordinated attack across multiple payment platforms demonstrates the sophisticated and targeted nature of this fraud. I am requesting the CFPB require PayPal to : Reimburse my account {$2000.00} in full Investigate how the preapproved payment authorization was established and from what device and IP address Provide me with all documentation used in their investigation Implement real-time fraud alerts for first-time payments to cryptocurrency merchants Implement additional verification for multiple large identical payments processed in a single day Implement warnings before establishing preapproved payment agreements with high-risk merchants

Company response to consumer: Closed with monetary relief