Get Your PayPal Complaint Solved

How to File a Complaint Against PayPal

Learn your options to get your voice heard and make PayPal pay

PayPal logo sourced from Wikimedia Commons

We’ve all been there one time or another, log into an account and see activity that you didn’t conduct or a charge that you weren’t expecting. If you’re having problems with your PayPal account-business or personal-you want the company to fix it fast.

Maybe someone used your account fraudulently in another state or country and you want the stolen money back. Maybe PayPal charged you twice for the same transaction. Perhaps the company put a hold unnecessarily on your account and it cost you a lot of business.

Now you need to know what to do next. Here are your options:

  • File a claim through PayPal
  • File a lawsuit against PayPal in small claims court
  • Use independent arbitration to settle your complaint against PayPal

Ready to get PayPal to listen? Start your claim for free.


Report Your Claim to PayPal Directly

PayPal customer service allows you to file a claim or a dispute on individual actions or purchases in your account, and the company’s fraud department is exceptionally fast in giving a response. You should back from the company within 24 hours of submitting an email, a chat, or calling. Most of the time the company provides you with a list of steps to follow, and then a back-and-forth ensues until your dispute is resolved.

If you contacted PayPal with your problem, the company sends you an email letting you know what steps you have to follow to fix the issue, but sometimes issues remain unresolved.

Here are the to options to take action against PayPal.

File a Claim Against PayPal in Small Claims Court

Why small claims court? Because your contract with PayPal probably limits your ability to exercise any other lawsuit. Arbitration clauses worked into your PayPal terms of service agreement prohibit you from joining  a class action lawsuit or filing a class action lawsuit. However, the agreement gives you the option of using small claims court or consumer arbitration.

Is Small Claims Court the Best Solution?

Just because you know how to sue PayPal in small claims court doesn’t mean you can. Not every case is eligible.

Small claims court will only handle monetary compensation not equitable compensation. This can be a problem if, for example, you were using PayPal for a transaction that involves physical goods. If you have a collectors coin that you sold through PayPal, but the buyer turned out to be fraudulent, you might want that coin back as compensation or a similar coin which is not something most small claims courts will do.

What they will do instead is offer monetary compensation which is, in effect, the value of the goods you lost.

This is something you need to take into consideration when you are figuring out how much money you want PayPal to give you to solve the problem.

This is important because most small claims courts have a monetary small claims court limit. For most states it’s between $5,000 and $10,000 and for a few states it goes as low as $2,500. If you are trying to get compensation for fraudulent charges worth only $500, this won’t qualify.


Using the example above, if you lost $500 in fraudulent charges and the coin the value of which is $5,000, now you have a case.

If the total losses exceed the small claims court maximum limit you can still technically sue, but you won’t be able to sue for the total amount. If your damages are $12,000 and your state has a maximum of $10,000, you would only be able to sue for up to $10,000.

How to Sue PayPal in Small Claims Court

The first thing you have to do is send a demand letter, contact PayPal once more just to let them know that you’re headed to small claims court but you are first giving them the opportunity to fix the problem.

In many cases if the company believes that you will actually file a case against them, they might offer you a settlement before hand in exchange for you dropping the case.

In this demand letter you need to include why you are writing. Let them know that you’ve previously had an issue, outline what that issue is and what steps you tried to do with PayPal to fix it, and what you want them to do now. this should be a short, clear letter that demands payment for the damages they did. Send the hard copy via certified mail to their official address at:

PayPal, Inc.

Attn: Litigation Department

2211 North First Street

San Jose, CA 95131

If you don’t get a response or the response you get is not as polite or apologetic as you might have expected, then you follow these steps:

  1. Fill out your state required forms. You have to fill out the state required paperwork which you can find on your state court website. Your county might have specific paperwork to go along with this so double-check. Make sure you have enough copies too. Most courts require three or four copies and if you don’t have enough, no, they won’t let you borrow their copy machine. You’ll have to come back tomorrow.
  2. Formally file your complaint with the court. Bring all of your forms to the courthouse during the hours and days specified on your course website. Head to the county clerk’s office where you will pay the small claims court fees and file your small claim paperwork. They will give you a stamped copy of your forms as well as your upcoming court date.
  3. Legally “serve” PayPal.  You have to legally notify PayPal, again, that you have taken additional action. This means officially serving them copies of your court papers. Look at your state court website for specific instructions on how to deliver this to PayPal. If you don’t follow each and every instruction, they will throw out your case.
  4. On the day of your hearing, head to the courthouse with copies of your filed forms and any evidence you have which can include previous conversations or emails exchanged with PayPal, anything that shows what you’ve tried to do in the past, what they did wrong, and why you want them to fix it.

Use Consumer Arbitration to Settle Your Complaint Against PayPal

If you fall outside of the requirements for small claims court or this just seems far too time-consuming, there is always the consumer arbitration process. The steps for this are pretty similar to a small claims court, but we help you generate documents and serve the right people.

Steps to File a Claim Against PayPal with Consumer Arbitration

  1. Submit your complaint to PayPal. This is an official, legal notice that you are going to pursue legal action if they don’t fix the problem. You can tell us what they did, what you’ve tried to do, and how you want them to fix it now using our online interface. We generate the legal notice for you and submitted on your behalf.
  2. We also create the hard-copy demand letter in which is a time frame. We don’t just ask PayPal to fix it whenever they feel like it. We asked them to fix it by specific date, otherwise you will go on to consumer arbitration.
  3. PayPal might settle at this point, give you an offer, or apologize for the oversight and finally take action. But they might not. If they don’t, file your arbitration documents from the American Arbitration Association. We file on your behalf with a “documents only” arbitration process so you don’t have to take time off work to meet with anyone in person.
  4. The documents are filed with the American Arbitration Association on your behalf. They appoint a case administrator to collect information from you and from PayPal, to schedule any appointments, and let you know when the arbitrator is assigned. The arbitrator sets a hearing date just like a judge, and you can choose to do this over the phone, in person, or “documents only”.

Watch: How to File an Official Claim Against PayPal

You have legal options to deal with a PayPal dispute. Let our expert team help you submit an official claim against PayPal now. Start your claim.

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