Consumer complaint received 2026-04-28 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: Paypal Holdings, Inc
State: FL

Complaint narrative:
COMPLAINT DESCRIPTION : I am a victim of a violent extortion scheme. I am filing this complaint because PayPal is demanding that I pay negative balances on XXXX of my accounts, even though those negative balances are the direct result of chargebacks I filed after being forced to send money under duress. PayPal has refused to place these accounts under fraud review and continues to demand payment, threatening to send the balances to collections. ACCOUNTS AFFECTED : - Personal PayPal Account ( XXXX XXXX ) : Negative balance of - {$80.00} - Business PayPal Account ( World Kickboxing Gym ) : Negative balance of - {$460.00} CRIMINAL BACKGROUND : I have been the victim of a violent extortion and kidnapping scheme for XXXX years. The perpetrators held me at gunpoint twice and threatened to send a hitman from jail. They impersonated FBI agents and federal judges ( a federal crime under 18 U.S.C. 912 ). The extortion scheme has stolen over {$5.00} XXXX from me. I have filed a police report with the XXXX XXXX Police Department ( Case # : XXXX ) and an FTC Identity Theft Report ( Report # : XXXX ). WHY THE NEGATIVE BALANCES EXIST : After being forced to send money under duress, I reported the unauthorized transactions to my credit card issuer, XXXX XXXX. XXXX XXXX investigated and filed chargebacks on the coerced transactions. When XXXX withdrew the funds from PayPal, PayPal debited my accounts to recover those funds, resulting in negative balances. Under the Electronic Fund Transfer Act ( EFTA ) and Regulation E, an unauthorized electronic fund transfer includes a transfer initiated by a person who obtained access through force or intimidation. I was held at gunpoint. I did NOT authorize these transactions voluntarily. Consent obtained through duress is not valid consent under the law. PAYPAL 'S RESPONSE : I contacted PayPal to explain that these negative balances are disputed and arise directly from chargebacks filed against an extortion scheme. I provided my police report number and FTC Identity Theft Report number. PayPal refuses to place these accounts under fraud review and continues to demand that I pay the negative balances. PayPal has threatened to send these balances to collections if I do not pay. LEGAL VIOLATIONS : 1. Electronic Fund Transfer Act ( EFTA ) and Regulation E Violation : Under Regulation E ( 12 C.F.R. 1005.2 ), an unauthorized electronic fund transfer includes a transfer initiated by a person who obtained access through force or intimidation. I was held at gunpoint. The chargebacks were filed because the underlying transactions were unauthorized. PayPal is attempting to collect debt that arose from unauthorized activity. 2. Failure to Investigate Unauthorized Activity : Under EFTA, financial institutions and payment platforms must investigate claims of unauthorized activity. PayPal has failed to conduct a proper investigation into the nature of the underlying transactions. 3. Unfair and Deceptive Practices : PayPal 's demand that I pay negative balances that resulted from chargebacks against extortion, while refusing to place the accounts under fraud review, constitutes an unfair and deceptive practice in violation of consumer protection laws. 4. Violation of PayPal 's Own Policies : PayPal 's policy states that unauthorized activity should be reported. I reported the activity. PayPal 's refusal to treat these balances as disputed is contrary to its own policies. WHAT I AM REQUESTING : 1. PayPal must place both of my accounts under fraud review immediately. 2. PayPal must suspend all collection activity on these disputed balances while the chargeback process is ongoing. 3. PayPal must provide written confirmation that these balances will not be sent to collections. 4. PayPal must provide written confirmation after the review is complete. PRIOR RESOLUTION ATTEMPTS : I have attempted to resolve this matter directly with PayPal multiple times : - I called PayPal customer service ( XXXX ) and spoke with representatives - I requested to speak with supervisors and the Fraud Department - I provided my police report number and FTC Identity Theft Report number- I requested that the accounts be placed under fraud review - PayPal refused and continues to demand payment EVIDENCE ATTACHED : - Police report ( Case # : XXXX ) - FTC Identity Theft Report ( Report # : XXXX ) - Documentation of the extortion scheme I declare under penalty of perjury that the foregoing is true and correct. " " Section 5 : Desired Resolution Select or write : Desired resolution : " PayPal must place my XXXX accounts under fraud review, suspend all collection activity on the disputed negative balances, provide written confirmation that these balances will not be sent to collections, and complete a formal review of the unauthorized activity that led to the chargebacks. '' Section 6 : Attachments Attach the following documents : Document Attached? Police report ( Case # : XXXX ) FTC Identity Theft Report ( Report # : XXXX )

Company response to consumer: Closed with explanation