Consumer complaint received 2026-01-10 00:00:00
Product: Checking or savings account — Other banking product or service
Issue: Problem with a lender or other company charging your account — Can't stop withdrawals from your account
Company: Paypal Holdings, Inc
State: MN

Complaint narrative:
This complaint concerns a systemic practice by PayPal , Inc., not an isolated account dispute.

PayPal operates an internal billing authorization token system that extracts funds from consumer accounts after cancellation, refund, and stop-payment notice, without providing consumers or regulators with verifiable records that withdrawals are initiated by merchants or settled to merchants. 

The issue described below affects any consumer subject to PayPals token system.

SYSTEMIC ISSUE SUMMARY PayPal maintains exclusive control over billing authorization tokens used to debit consumer accounts. These tokens : Persist after subscription cancellation, Persist after refunds acknowledging lack of authorization or service, Persist after explicit consumer notice to stop payment, Can not be viewed, revoked, or XXXX by consumers. 

XXXXayPals system allows continued withdrawals without consumer control and without merchant-visible billing artifacts.

OBSERVABLE SYSTEM BEHAVIOR Across affected accounts, PayPal transaction histories display : Debit entries labeled as withdrawals, No invoice records, No subscription records, No contemporaneous merchant billing requests, No settlement or remittance confirmation to merchants.

The only verifiable action is that PayPal debits the consumer account. PayPal does not provide a c
onsumer-accessible audit trail establishing that : A merchant initiated the charge at the time of debit, or Funds were transferred to a merchant rather than retained internally.

REGULATORY IMPLICATIONS ( SYSTEMIC ) This practice implicates multiple provisions of the Electronic Fund Transfer Act and Regulation E ( 12 CFR Part 1005 ) on a systemic basis, including : Unauthorized electronic fund transfers ( 1005.2 ( m ) ), Failure to honor stop-payment instructions for preauthorized transfers ( 1005.10 ( c ) ), Failure to investigate and correct errors ( 1005.11 ).

PayPals token architecture prevents consumers from exercising statutory rights by design.

CONTROL AND AUTHORITY STRUCTURE PayPal, not merchants and not consumers, controls : Token issuance, Token persistence, Token execution, Token termination.

Consumers can not independently revoke authorization.

Stop-payment notices do not reliably terminate token execution.

Refunds do not permanently revoke tokens.

This places PayPal in the position of effective initiator of the transfer once merchant access is severed.

CONSUMER HARM ( CLASS-WIDE ) The system produces predictable harm : Unauthorized debits after cancellation or refund, Inability to stop payment through ordinary means, Forced card cancellation as a substitute for compliance, Loss of access to funds, Repeated withdrawals without transparent justification.

This harm is structural, not accidental.

REQUESTED CFPB ACTION ( SYSTEMIC ) I respectfully request that the CFPB : Investigate PayPals billing authorization token system as a systemic practice.

Require PayPal to demonstrate, for token-based withdrawals : Merchant-initiated billing requests, Settlement or remittance records to merchants.

Documentation demonstrating the described system behavior can be provided upon request.

Company response to consumer: Closed with explanation