Get Paid for Your PayPal Complaint

What Some Customers Get in Compensation from PayPal

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When it comes to PayPal issues we’ve heard it all: wrongly closed accounts, confiscated funds, unresponsive customer service, and more.

It might feel like there’s nothing you can do, but some customers are getting justice.


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What other customers have gotten in relief from PayPal through arbitration:

So you have a PayPal complaint. A major issue. And PayPal customer service hasn’t solved your complaint.

You’re not alone. On ConsumerAffairs.com, PayPal has just 1 out of 5 stars for its satisfaction rating, based on reviews from nearly 850 consumers. That’s a lot of people who feel let down by such a big company.

But when you’re just one consumer going up against a major company like PayPal, what can you do? How can you fight back against a company with so many resources? Is it going to cost a ton of money or take up a lot of your time?

We’re here to help. If you have a PayPal complaint and aren’t sure what to do next, this article can help. Below, we’ll look at PayPal complaints by the numbers, what options consumers typically have against companies like PayPal, and a step-by-step guide for making a complaint and getting justice.


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In 2018, 12 complaints against PayPal were resolved through the arbitration system.

Among those complaints, five resulted in a settlement. That’s a positive outcome for at least 42 percent of complaints against PayPal.

Exact settlement amounts typically aren’t made public, but we do know that the average complaint against PayPal asked for $1,558 in compensation.

We also know that at least two customers received non-monetary compensation from PayPal after arbitrating their complaints.

Now for the bad news: Arbitration complaints against PayPal in 2018 took an average of over three months each to resolve. That’s a long time to wait for justice. But if you’re considering arbitration for your PayPal complaint, you may not actually have to wait that long. There could be a faster and easier way to resolve your complaint (but we’ll get to that further down).

PayPal Complaints: What Are Your Options?

Consumers often have many questions when they have a complaint against PaPal: how can you make them hear your PayPal complaint? Can you sue PayPal? What sort of compensation do customers get from PayPal their complaints?

Here’s the bad news: Your contract with PayPal (AKA the terms and conditions you might have clicked “agree” on whether you read them or not) likely limits your options for legal complaints against PayPal. When you have a complaint against a business that usually includes a mandatory arbitration clause in its contracts, you usually have two options:

  1. Take your PayPal complaint to Small Claims Court, or
  2. Take your PayPal complaint to Consumer Arbitration.

Watch: How to File an Official Claim Against PayPal


One option isn’t necessarily better than the other — that will all depend on the specifics of your case. But before you decide how to proceed with your complaint against PayPal, you should know as much as possible about both options so you’re sure you’re choosing the one that’s best for you.

How To File a PayPal Complaint: Step-By-Step

Before you even get to the point of choosing between small claims court and arbitration, there are some other steps you must take to help resolve your PayPal complaint. Here’s how to go through the process, step-by-step, to increase your odds of getting a good resolution.

As you go through these steps, remember to try to document everything. Whenever possible, communicate with PayPal representatives in writing so there’s record of what’s said — on both sides. Save transaction IDs and case numbers. Take screenshots. If you ever talk to someone from PayPal on the phone, take careful notes so you have a record of the conversation.

If you eventually need to take your complaint to small claims court or consumer arbitration, the documentation will help you show that you made a good-faith effort to resolve your complaint directly with PayPal. It will provide evidence of any shortcomings on PayPal’s side. It could go a long way toward helping you get the justice you deserve.

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Step 1: Reach Out to PayPal Customer Service

Your first step when you have a complaint against any company should be to try to resolve the complaint with customer service.

That means you should reach out to PayPal customer service, which you can do in a few different ways:

  • Via their Help Center.
  • By sending them a message through your PayPal account.
  • By phone at 1 (888) 221-1161.

Whenever possible, we recommend reaching out in writing so there’s a clear, written account of everything PayPal says about your complaint. If they refuse to help you, this will be useful later.

You should also try to follow whatever instructions you receive from PayPal customer service (within reason). If they give you a way you might be able to resolve your dispute, act in good faith and try to work with them. But if they ask something unreasonable, are unhelpful, or say they can’t or won’t solve your complaint, it’s time to move on to step two.

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Step 2: File a Formal PayPal Complaint

If PayPal’s customer service isn’t getting to the bottom of your complaint, the company also offers a way on its website to file a formal complaint. You can do this by going to PayPal’s “Contact us” page and clicking “Feedback and formal complaints.” From there, you can choose from a number of categories. Choose what best fits your complaint out of:

  • Opening a claim for an item you never received or that didn’t match its description.
  • Managing your profile and transactions.
  • Complaining about the decision made for a dispute you filed.
  • Complaining about poor customer service you received.
  • Complaining about a limitation on your account.
  • Complaining about PayPal policy or a product feature.
  • Complaining about a transaction.

Filing a formal complaint will open a ticket with PayPal’s customer service that you can escalate as needed.

Step 3: Dispute a PayPal Transaction (Optional)

This step won’t necessarily fit every type of complaint. But if your complaint is around a PayPal transaction, you might be able to resolve it by filing a dispute.

You can do so by logging into your PayPal account and opening a dispute in the Resolution Center. Note that before you dispute a transaction with PayPal, you might need to take some other steps with the merchant whose transaction you’re disputing. In this case, your complaint might actually be with that merchant, and not with PayPal.

Step 4: Escalate Your Complaint to Small Claims or Arbitration

If you’ve worked with PayPal’s customer service and filed a formal complaint and still haven’t received resolution for your complaint, it might be time to take further action — especially if you’re trying to get money back.

Remember above when we talked about how PayPal’s terms and conditions likely limit you to two legal options? Now it’s time to choose between them. With most lawsuits off the table, you can:

  • Take PayPal to small claims court, or
  • Begin the process of consumer arbitration.

These two options actually have a lot of similarities.

Small Claims Court

Small claims court is a court specially designed to handle disputes that involve a small amount of money, which should cover most consumer disputes with businesses like PayPal. States set their own limits on the amount for which you can sue in small court — for the most part, it ranges from $2,500 to $15,000.

Small claims court is generally (but not always) faster and less expensive than a business lawsuit. You don’t need a lawyer for a small claims suit (in fact, some states outright prohibit lawyers in small claims). There’s usually not a jury — instead, a judge hears both sides of the dispute, reviews any evidence, and makes a binding decision.

The process for filing a small claims suit also varies by state — in some places, you can file your paperwork online, while in others, you’ll need to do it in person. For details about how to do so in your state, visit your State Attorney General’s website.

Consumer Arbitration

The process of consumer arbitration is actually pretty similar to a small claims lawsuit, only in this case, instead of presenting your case and evidence to a judge, you’ll work with an independent arbitrator, who is a specially trained, neutral third party.

Consumer arbitration can often be done virtually, over a video conference or by phone. That makes it a more convenient option for many people.

But if you have a PayPal complaint, there’s another reason you should consider arbitration.

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Why Choose Arbitration? Because FairShake Can Help

Ready for some more numbers?

Complaints handled by FairShake are often settled before arbitration, which can be much faster.

Taking a PayPal complaint to arbitration costs money, but the company is usually responsible for costs. PayPal paid $500 in fees per complaint on average.

Meanwhile, 100% of consumers paid nothing in arbitration fees for their complaint against PayPal through the American Arbitration Association.


Watch: An Intro to FairShake

Our co-founder walks you through how FairShake can help you take on PayPal and win compensation.


In other words, you need someone on your side when resolving your PayPal complaint. FairShake is your secret weapon for getting the power back where it belongs — in your hands.

Take the first step toward resolving your PayPal complaint today. Start a claim.





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