PayPal User Suffered 'Collection Abuse and Constant Harassment' in Trying to Resolve Money-Sending Error, Class Action Claims

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A PayPal user and Synchrony Bank accountholder alleges in a lawsuit that she was given “confusing and conflicting information” and experienced what amounts to abuse and harassment in trying resolve a mistake that occurred during an attempt to send money to her daughter. 

The plaintiff, a San Diego County resident, claims in the 14-page proposed class action that she experienced confusion and “a great amount of stress, aggravation and anxiety” in her communications with PayPal after she attempted to send $1,000 from her Synchrony Bank account to an email address that she mistakenly entered incorrectly. 

Despite reaching out to the defendants more than once to resolve the issue and end PayPal’s subsequent collection efforts, the plaintiff was unable to work with the companies to fix the problem and was subject to “collection abuse and constant harassment,” the seven-count complaint alleges. 

According to the lawsuit, the plaintiff tried to send her daughter $1,000 by way of PayPal’s platform around September 24, 2020. For the transaction, the plaintiff attempted to use her credit card account with PayPal Credit and Synchrony Bank, who charged the woman an additional $29.30 in fees to send the money, the suit says. 

The plaintiff, however, entered an incorrect email address for the recipient of the money, meaning her daughter did not receive the $1,000 as intended, the case relays. Per the complaint, the plaintiff and her daughter, a co-plaintiff on the lawsuit, immediately contacted PayPal to confirm the transaction was not completed and, if necessary, cancel and/or dispute the transmission. 

Another attempt from the plaintiff to send money to her daughter was successful, and the plaintiff was charged another $1,029.30 as a result, the suit reads. In early October 2020, the plaintiff made a payment to her PayPal credit card to cover the amount of funds and fees, the case says. 

In the months that followed, the plaintiffs contacted PayPal and Synchrony Bank “on several occasions” to resolve their issue with the initial unsuccessful transaction, the lawsuit continues. During these communications, PayPal, the suit says, would often advise the plaintiffs to contact PayPal Credit for help, but PayPal Credit would suggest they contact PayPal, Inc., the complaint claims, calling the apparent roundabout between the companies “confusing and conflicting information.” 

According to the suit, the plaintiffs received around September 28 an email from PayPal stating that “[a]fter reviewing all the details, and based on the information we have to date, we have to deny your case.” PayPal then stated the decision was made “because your billing dispute doesn’t match our qualification for a billing dispute,” the case says. 

In November, the plaintiffs experienced more of the same when an email came in from PayPal that stated, in pertinent part, that the company cannot or decided against investigating the dispute because the individuals “filed this dispute with your financial institution or credit card company, and not with PayPal,” the lawsuit relays. 

As a result of the foregoing, the plaintiffs’ issue remained unresolved, and they both “grew confused and suffered a great amount of stress, aggravation and anxiety,” the case says. 

In November 2020, PayPal sent the plaintiff’s daughter an email with regard to a dispute on the second (and successful) transaction of $1,000, the suit continues. In that email, PayPal advised the plaintiff’s daughter that she would be debited a $20 chargeback fee, the lawsuit claims, alleging the defendants wrongfully initiated a dispute on a successful transaction instead of rectifying the errors on the previous one. Shortly thereafter, PayPal “wrongfully began collection efforts” against the plaintiff’s daughter, the complaint alleges. 

According to the case, the plaintiffs were subjected to collection abuse and harassment, and suffered sleepless nights and anxiety, “as a result of [the] Defendants’ mistakes” and the companies’ inability to coordinate a resolution.

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