Consumer complaint received 2021-02-06 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem — 
Company: Paypal Holdings, Inc
State: FL

Complaint narrative:
On XX/XX/2021 I authorized payment of a {$2500.00} invoice using my XXXX XXXX XXXX credit card using Paypal. Instead of paying the invoice as I authorized, Paypal illegally and fraudulently embezzled funds using my Paypal balance. I immediately contacted Paypal customer service to correct their error, Paypal refused. They stated I had to request a refund from the vendor and she would have to reissue the invoice to use my credit. I called back and spoke with the Paypal Fraud department, as Paypal had in fact committed fraud, wherein the Fraud rep lied about the reason for their unlawful action. XXXX in the Paypal Fraud Department alleged my Paypal balance was used because XXXX XXXX declined the charge. This claim was utterly suspect as XXXX XXXX 's procedure in such cases is to contact the cardholder immediately with notice of such a decline. No notice was received, so I called XXXX XXXX. The agent stated that as is normal procedure, a " test '' transaction was in fact received from Paypal, however the {$2500.00} actual charge was not subsequently submitted, so the charge had never been declined. The XXXX XXXX agent offered to call the Paypal Fraud Dept while on the phone with me. Paypal Fraud Agent XXXX verified that, in fact the charge had NEVER been declined. She provided no reason for why my express payment authorization was usurped and my Paypal funds were misappropriated. Agent XXXX continued to refuse to correct the error. I contacted the vendor to issue a refund, but the vendor had already transferred the payment to her bank account XXXX smart ) so the funds were in transit. I conveyed this to XXXX, she said it did not matter the the funds would be returned regardless of where they were. After the refund was issued, Paypal 's website first indicated the funds would be in my account by XX/XX/XXXX, an hour later that date had been stricken and XX/XX/XXXX was listed. On XX/XX/XXXX, the funds were still not retuned to my Paypal account so I called. After an 18 minute hold, the Paypal rep asked me to refresh the screen and my funds MAGICALLY appeared. I immediately transferred the finds to my bank account, Paypal indicated my fund would arrive on XX/XX/XXXX - some 11 days AFTER this fraudulent transaction occurred. Paypal has ILLEGALLY commingled funds from 2 different businesses we own. This has caused not only severe emotional distress, but has resulted in the inability to pay bills for a completely unrelated business, because the income from that business was misappropriated by Paypal. If this is a pattern and practice of Paypal they should be severely sanctioned by this agency and perhaps a class action lawsuit is in order. Adding insult to injury, the vendor I paid {$2500.00} to - due to these facts - now refuses to do business with me. On top of that, the first customer service rep said this could all have been avoided had I processed the invoice payment as a " Guest '' instead of login in to my Paypal account. So Paypal treats " Guests ' BETTER THAN ITS CUSTOMERS. Note to self, we'll be using XXXX for payment processing going forward.

Company response to consumer: Closed with explanation