Backup funding source to pay balance not a backup funding source to pay balance?

[edsager]

I am unsure of what to do here.

My bank account is the primary with PayPal. 

I initiated a transaction and received notice from PayPal that if my bank account did not have sufficient funds to cover the transactions, it would use the backup credit card to pay the balance.  As a result of this assurance, I chose to not add $15 to my bank account, which would have made the bank account balance sufficient to cover the entire transaction.

Unfortunately, PayPal tried charging the entire amount to my bank account, and when it found insufficient funds, PayPal did not use the monies there and then go to my credit card to fund the balance, as the notice to me said it would.  This caused my bank balance to be overdrawn and I received an overdrawn account fee.  PayPal tried the bank account again and I received another overdrawn account fee.

The entire transaction was $41 and I have bank fees in the amount of $40.  PayPal said the only thing it can do is draft a letter to my bank asking that the fees be reversed.  PayPal also said that because the system is automatic, it could not stop the attempt to get funds from my bank account and also it did not have the tech sophistication to figure out the amount I had in my bank account and then use the backup credit card for the balance...even though that was what the notice from PayPal said it would do.

PayPal refused to refund the overdrawn amounts (the bank fees) and put me on hold for several minutes after I asked for a supervisor.  Also, when speaking with Pele, the first person with whom I spoke at PayPal, no matter what my question was, his response was to not answer my question, but to repeat himself over and over and over and over.

Has anyone else had this experience?

Has anyone ever resolved this type of dispute, or one substantially similar, with PayPal?

Any ideas as to with whom I need to speak regarding this?

Anyone have their legal counsel contact information?

Any other ideas?

I am extremely frustrated that PayPal stated it would do one thing and yet it did not do what it said it was going to do.

Thanks,

edsager

[cheryl1]

Something similar happened to me but they ran it through my bank 7 times giving me 7 overdraft fee of $245 and the did me the same way they would not help me at all and sent me the same email to ask the bank to refund the nsf's but bank wont cause it was not their error as a curtsy but I'm still in the hole for a $10 purchase that was cancelledDoes anyone know what i can do???

[desertrat53]

After many years of using PayPal with my backup funding set to my Master Card, I have had the same problem recently.  I never worried about the account balance as my credit card was always charged the difference needed.  Since November, I have had this happen three times with two different banks.  I was able to reverse the fees at one bank and have since closed the account.  Now, my primary bank account has been charged twice in the past three days for Insufficient Funds.  I will probably be able to get these charges reversed after explaining what has happened, but I have no clue as to why this is happening now, when it never was an issue before.  Maybe there was a policy change that we missed about the use of non-PayPal charge cards and something we need to do to activate the process again?  I have checked my profile and everything seems to be in order as far as "confirmations" go.  Does anyone else have any ideas about whether we have missed some policy update and how to avoid this annoyance in the future?  Since it has happened with two separate banks for me, I am reasonably certain it is not the banks causing this to happen.

[cheryl1]

I still have not had any response from Paypal about the mess they made my bank did reverse $140.00 to me but said Paypal would have to repay the rest.does anyone eles know what we can do about this?? who eles we need to talk to??I can not afford the errors.

[desertrat53]

Today, my Credit Union reversed the charges without issues.  I was told that the source of the problem is indeed PayPal - I found it interesting that one of the overdrafts triggered by PayPal occurred a couple of days ago but I just received their email informing me of such today.  I still am clueless as to why our credit card backup is failing, but will try and find the cause and post the information here.

[Genys]

It seems to me the reason why the backup is failing is because it doesn't work consistently across the board. WE expect that it will be exactly what it is called: a backup funding source for a primary funding source that doesn't have sufficient funds, no matter what the primary funding source may be. However, I also saw no sign of it being used as such and had the full amount taken from my bank account, resulting in an overdraft. I'm still corresponding with PayPal on this issue, and their answers continue to imply their system is set up to prevent overdrafts because the backup funding source will be used. Perhaps it works fine when your primary source is your PayPal balance, but it doesn't seem to work with bank accounts, and I'm getting disgusted that they don't make this clear nor warn users of the potential risks. (And believe me, I've done a lot of help center searching and read half a dozen of their legal agreements; this information just isn't to be found easily, if at all.)

[desertrat53]

It seems odd that it did pull the amount needed to prevent and overdraft on my credit union account a week before Christmas, but the last couple of times it has not and I have gotten an ovedraft.  As you stated, I have never had this issue when using my PayPal balance, but it has happened with one bank and my credit union.  I am now careful and make certain the the primary funding is set to my credit card when my credit union account has a low balance.

[jcraig9218]

Sounds like the same thing happened to me. I recently authorized a payment to a vendor and saw the PayPal advisory that if my primary account had insufficient funds, the backup account would cover it instead. Now I find an overdraft charge of $25 in my primary account and apparently the backup credit card was never used. I checked and all information is correct and current. Please explain why this happened and how I can be reimbursed for the error.  My suspicious mind tells me the bank takes advantage of the situation to collect overdraft fees. Thank you.

[ronderg]

Nobody here is really taking care of us. Not bank, not PayPal, you just have to pay!

[SGL]

I had this problem recently. With calling PayPal yesterday, the woman was very courteous and apologetic. She couldn't correct anything, like reverse transactions or pay the insufficient funds fees, as the transaction had already went through and PayPal, EBay, &  then the Seller received the money.  She said would send me an email to take to my bank. I haven't received the email, but I didn't need it anyway. I called my Bank, told the representative the situation, and she was able to reverse the insufficient funds for me ($70) because her supervisors had heard of this situation. I was asked to cover the balance that was needed within the next few days. Done, this morning! At this minute, my bank account transactions are all in order with no fees. 🙂

As for PayPal correcting this processing issue, they definitely need to get on the ball...