Consumer complaint received 2026-05-07 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:
CFPB COMPLAINT PAYPAL ( SECOND COMPLAINT / ESCALATION ) Company : PayPal , Inc . Issue : Unfair dispute handling, improper account restriction, UDAAP violations, failure to honor Seller Protection, financial injury Product : Payment services What happened : I am filing this complaint because PayPal has continued to mishandle a {$10000.00} transaction dispute, imposed improper fees, and permanently restricted my account without justification. PayPals response to my initial CFPB complaint was incomplete and failed to address the core issues. Transaction Background In XX/XX/year>, I sold {$10000.00} worth of electrical equipment. The buyer paid through PayPal. I complied with every Seller Protection requirement, including : Shipping to the buyers confirmed address Providing valid UPS tracking Delivery confirmation Adult signature confirmation Photographs of the shipment and labels A fully paid invoice Buyer communication screenshots Despite this, the buyer falsely claimed Item Not Received. I submitted all evidence proving delivery and signature confirmation. PayPal Wrongfully Refunded the Buyer PayPal refunded the buyer in full, removed {$10000.00} from my account, and left me without the merchandise or the funds. PayPal has not identified any valid exception to Seller Protection. Improper Fees After reversing the transaction, PayPal attempted to charge me over {$400.00} in additional fees, even though the dispute was caused by buyer fraud and I fully complied with PayPals policies. Permanent Account Restriction PayPal then permanently restricted my account, stating I could no longer use PayPal or receive Seller Protection. No explanation was provided for : Why Seller Protection was denied Why the account was restricted Why additional fees were imposed Why clear evidence of delivery was ignored Failure to Address Issues in Their CFPB Response PayPals response to my first CFPB complaint did not address : Why signatureconfirmed delivery was disregarded Why Seller Protection was denied Why I was charged additional fees Why my account was permanently restricted Why the buyer was refunded despite clear evidence of fraud Why no written explanation was provided Their response was generic, incomplete, and avoided the core violations. Why this is a regulatory issue : PayPals actions constitute unfair, deceptive, or abusive acts or practices ( UDAAP ) because : They ignored clear evidence required under their own Seller Protection policy They enabled buyer fraud They imposed improper fees They permanently restricted my account without cause They failed to provide a meaningful explanation or justification They caused a financial loss exceeding {$10000.00} This is not a customer service issuethis is a systemic failure in PayPals dispute handling and compliance process. Subject : PayPals Response Contains Material Misrepresentations, Procedural Violations, and Clear UDAAP Violations I am submitting this rebuttal because PayPals response is factually incorrect, internally contradictory, and openly admits to conduct that violates both the PayPal User Agreement and federal consumer protection law. PayPals own written response contains multiple fatal admissions that prove the {$10000.00} refund was issued improperly, without evidence review, and solely due to an internal account limitation unrelated to the transaction. Below is a structured breakdown of PayPals violations. 1. PayPal admits I provided all required documentation on XX/XX/year> PayPal states I provided : Invoices Transactional information Photos of the items Proof of ID This means PayPal had everything required to evaluate the transaction. Yet they admit they did not evaluate any of it. 2. PayPal admits the buyer filed the claim AFTER PayPal limited my account Their timeline shows : XX/XX/XXXX : PayPal limits account XX/XX/XXXX : I provide all requested documentation XX/XX/XXXX : Buyer files Item Not Received claim XX/XX/XXXX : PayPal immediately closes claim in buyers favor This is the key issue : PayPal refunded the buyer because my account was limited, not because of evidence. This is a direct violation of : PayPal Seller Protection Policy PayPal User Agreement CFPB UDAAP standards FTC unfair business practice rules Seller Protection eligibility is based on transaction compliance, not account status. 3. PayPal admits they never reviewed tracking, delivery, or signature PayPals response contains XXXX reference to : Tracking number Delivery confirmation Adult signature Address match Carrier proof Because they never reviewed it. Instead, they state : We closed the claim in the buyers favor because your account was permanently limited. This is an admission that the refund was procedurally automatic, not evidencebased. This is a textbook unfair and deceptive practice. 4. PayPal falsely claims customers were dissatisfied PayPal states : It appears customers were dissatisfied with this businesss service. This is a false statement. PayPal provided : No complaints No disputes No chargebacks No negative feedback No evidence of dissatisfaction This is a material misrepresentation used to justify an improper limitation. 5. PayPal admits they denied both appeals for risk, not evidence PayPal states both appeals were denied due to the reasons above, which are : Account risk Internal review Not transaction evidence This is another admission that : PayPal never evaluated the transaction on its merits. This violates their own Seller Protection rules. 6. PayPal admits they charged a dispute fee for a dispute they refused to adjudicate They charged a {$30.00} dispute fee even though : They did not allow me to defend the claim They did not review evidence They closed the case automatically Charging a fee for a process they refused to provide is another UDAAP violation. 7. XXXX final justification is legally invalid PayPal states : We are unable to extend protection because your account is not in good standing. This is the most serious admission. Seller Protection eligibility is based on : Proof of shipment Proof of delivery Signature Address match NOT account standing. This is a direct violation of PayPals own contract and a deceptive business practice. 8. What I am requesting I am requesting : 1. Immediate reinstatement of the {$10000.00} improperly refunded to the buyer 2. Removal of all dispute fees and negative balance charges 3. Correction of PayPals false statements regarding dissatisfied customers 4. A full investigation into PayPals procedural misconduct 5. A review by PayPals Executive Escalations team, not automated risk staff PayPals own response proves : They did not follow their own policies They did not evaluate evidence They refunded a buyer solely due to an internal limitation They misrepresented facts to justify their actions 9. Closing Statement PayPals response is not only inadequate it is selfincriminating. Their own admissions confirm that the refund was improper, the appeals were mishandled, and the denial of Seller Protection was unlawful. I request immediate CFPB intervention. What resolution I am requesting : I am requesting the CFPBs assistance to require PayPal to : 1. Reinstate the {$10000.00} removed from my account 2. Remove all improper fees charged in connection with this dispute 3. Provide a written explanation for : Denial of Seller Protection Permanent account restriction Ignoring signatureconfirmed delivery 4. Correct procedural and compliance failures in their dispute handling 5. Restore my account access or provide a legally valid reason for the restriction PayPals actions have caused significant financial harm and enabled clear buyer fraud. Their failure to address the issues in their initial CFPB response requires escalation

Company response to consumer: Closed with explanation