Consumer complaint received 2025-03-07 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Confusing or missing disclosures — 
Company: Paypal Holdings, Inc
State: MD

Complaint narrative:
: Formal Complaint Against PayPals Unjust Account Limitation and Fund Withholding Practices Dear Consumer Financial Protection Bureau, I am writing to formally lodge a complaint against PayPal for their unjust and arbitrary actions concerning the limitation of my account and the subsequent withholding of my funds. Having recently regained access to my account after years of limitation, I diligently followed all provided instructions to restore its functionality. The primary reason for restoring my account was to facilitate payments for my virtual assistance services, as my client exclusively utilizes PayPal for transactions with overseas employees. 

Upon restoration, I promptly submitted invoices to my client and received payments. However, PayPal notified me of a hold on these funds, citing the need to complete certain unspecified requirements on the platform. Despite my efforts to locate and fulfill these requirements, the instructions provided were either unclear or inapplicable to my situation. Given that the payments were for services rendered and not tangible goods, PayPal indicated that the hold would last 7 days, a duration shorter than the standard 21 days applied to physical items awaiting shipment. Contrarily, the hold period was set to 21 days without adequate justification. 

PayPals platform further suggested that users could request an expedited review of such holds. I initiated this process and was assured by a PayPal representative that, considering the nature of my services, a specific amount would be made available for immediate use. To my dismay, less than 24 hours later, I received an email and an in-app notification informing me of a permanent ban on my account. This ban prohibits any transactions, including refunds to clients, and imposes a 180-day hold on my funds, with the possibility of forfeiture. No explanations or reasons were provided for this drastic action. 

In my attempt to seek clarification, a customer service agent informed me that my account was automatically flagged by their system. She mentioned submitting an appeal on my behalf, with a decision pending after 7 days. This process places me at the mercy of PayPals opaque and seemingly arbitrary system, leaving me in a state of uncertainty and financial limbo. 

I find PayPals practices to be not only unfair but also oppressive. The company imposes exorbitant fees, offers unfavorable foreign exchange rates, and subjects users to indefinite holds on funds without proper justification. The recent actions against my account have caused significant distress, as I am unable to access funds owed to me for services already rendered. The lack of transparency and accountability in PayPals operations is deeply concerning.

I respectfully request that the Consumer Financial Protection Bureau investigate PayPals account limitation and fund withholding practices to ensure they comply with federal regulations and uphold consumer rights. No consumer should be subjected to such arbitrary actions without clear explanations and justifiable reasons.

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Company response to consumer: Closed with explanation