Consumer complaint received 2025-09-08 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Trouble accessing funds in your mobile or digital wallet — 
Company: Paypal Holdings, Inc
State: MN

Complaint narrative:
Complaint Title PayPal Misrepresented Appeal Rights in CFPB Response and Arbitrarily Seized Funds Statement of Facts On XX/XX/XXXX, which was a Saturday, PayPal responded to my prior CFPB complaint ( XXXX ). In that response, PayPal stated that I could appeal my permanent account limitation by submitting documentation. 

On XX/XX/XXXX at XXXX XXXX  CDT, I fully complied. Through PayPals Resolution Center, I submitted : Government-issued identification Proof of address Bank and credit card statements Authorization for use of my spouses account A detailed explanation of my account activity The system confirmed my submission as completed and under review, with a stated three business day review period. 

I also note that my use of my spouses XXXX XXXX account was fully authorized. He provided written authorization, which I submitted, and the account was used solely for household bills and shared family expenses. Under both federal and state law, including the Electronic Fund Transfer Act ( 15 U.S.C. 1693a ( 7 ) ) and its implementing rule Regulation E ( 12 C.F.R. Part 1005 ), an authorized user is expressly recognized where consent is given by the account holder. Financial institutions, including PayPal, must treat such transactions as valid. It is not improper or unlawful to use a spouses account with permission. PayPals attempt to characterize this as unusual or suspicious is baseless, contrary to established law, and constitutes misrepresentation of ordinary household financial arrangements. 

On XX/XX/XXXX at XXXX XXXX  CDT, which was a Sunday, PayPal sent me an email permanently deactivating my account. This was less than 24 hours after my full compliance. PayPal does not ordinarily process account reviews on weekends. The timing demonstrates that my documentation was not reviewed. This directly contradicted PayPals representation to the CFPB that I had an appeal process and that my submitted materials would be evaluated.

In its CFPB response, PayPal identified only two reimbursements of {$36.00} and {$45.00} as potentially problematic. Nevertheless, PayPal also seized an additional reimbursement of {$100.00}, which was never identified or flagged in its filings. That reimbursement was legitimate, documented by receipts, and unrelated to the two transactions PayPal described. I am not contesting the two smaller reimbursements. My dispute centers on PayPals seizure of the {$100.00} reimbursement, which it never alleged was improper.

Legal and Regulatory Concerns 1. Misrepresentation to CFPB : PayPal assured the CFPB that an appeal was available if documentation was submitted. I complied in full on XX/XX/XXXX at XXXX XXXX  CDT, yet the account was permanently closed by email at XXXX XXXX   CDT on XX/XX/XXXX, before any review occurred. 


2. Electronic Fund Transfer Act ( EFTA ) and Regulation E ( 12 C.F.R. Part 1005 ) : PayPal must investigate and resolve errors fairly. Seizing funds that were not identified as disputed, and closing the account without reviewing submitted documentation, violates these obligations.

3. UDAAP ( Unfair, Deceptive, or Abusive Acts or Practices ) : Misrepresenting the availability of an appeal process Seizing funds not identified as disputed Relabeling debits as Correction, Transfer, Correction, which obscures the audit trail and misrepresents account activity 4. Systemic Failures : PayPal previously admitted to mass erroneous closures. My case demonstrates the same systemic flaws, compounded by misrepresentation to the CFPB and arbitrary seizure of legitimate funds.

5. Account History : My PayPal account has documented history since XXXX, with no chargebacks, disputes, or policy violations in that time.

Requested Relief I respectfully request that the CFPB require PayPal to : 1. Restore my PayPal account access 2. Return the {$100.00} reimbursement that was improperly seized 3. Provide a written explanation, citing policy or law, if they refuse 4. Explain why PayPal told the CFPB an appeal process was available but then closed my account less than 24 hours later on a weekend when no review could reasonably have occurred 5. Correct its handling of reimbursements to ensure that legitimate consumer transactions are not misclassified, relabeled, or seized without cause Exhibit Exhibit A Comprehensive Documentatio
n Packet ( submitted XX/XX/XXXX at XXXX XXXX  CDT ) This packet contains : Government ID and proof of address ( DHS statement ) Bank account statements : XXXX, XXXX XXXX ( husbands with authorization ), XXXX Credit card statements : XXXX XXXX Active Cash ( authorized user ), XXXX XXXX XXXX, XXXX XXXX XXXX authorization letter signed by spouse granting account use Copies of checks and account authorization confirmations Detailed written explanations : Explanation of Account Activity Change, Restore Account letter, and payment lists Permanent deactivation email dated XX/XX/XXXX at XXXX XXXX  CDT Closing I affirm that the information provided in this complaint is true and accurate to the best of my knowledge. All supporting documentation has been preserved and is available for review. If the Bureau requires any additional materials, I will provide them promptly upon request. 

Respectfully submitted, XXXX XXXX

Company response to consumer: Closed with explanation