Today I was let down by PayPal.  Here is how it happened.

About ten years ago someone opened a PayPal account in my name.  The account was fraudulent, and the only way I found out about it was an accident.  I tried to add one of my credit cards to my PayPal account and was rejected because the credit card was already tied to another PayPal account.  Another PayPal account?  What?  I don't have any other PayPal accounts!  So I called PayPal, and the FBI...

So this was in 2003, the account was opened in 2000.  I reported the account as fraud to PayPal and the FBI.  A case was opened by the FBI, but PayPal told the FBI that they would have to subpoena PayPal to obtain the fraudulent information on the account to do the investigation.  Well, the FBI must get a lot of these cases, and at the time the FBI agent told me that they would not follow through with the case due to the time required.  PayPal told me they locked the account as fraud.  Case closed.

Fast forward 7 years.

I received a letter today from a collections company called ER Solutions, and a phone call.  They started ratteling off my address and social security number to me.  I told them since I did not initiate the call, that I am not going to respond to their questions.  So during the phone call I found out nothing.  Then I found the letter in my stack of mail from a few days earlier.  The letter from ER Solutions said I owed PayPal $4200 and that they would be happy if I paid 50% of the debt and to call them back now to pay.  Slightly disturbed, I call PayPal.

Here is where it gets disturbing.

PayPal did turn over that fraudulent account to the collections agency and gave them all of my Personally Identifiable information (like my Name, Address and Social Security Number) to try to collect.

More than slightly disturbed I asked PayPal why this happened.  They claimed that the account had never been confirmed as fraudulent.

So now I have to dig up all of that information from 7 years ago and fax it over to PayPal (most of which came from them) and most likely call the FBI again to have them re-open the case to exhaunerate my name before the collections agency reports this to the credit agencies.

Nice.

I am hopeful that PayPal will resolve this issue, and I will finally be able to put it behind me with no worries that it will resurface in 7 years.  However I am becoming less hopeful as I search through Google on the subject.  This is the scary part.  I am definately not the only one.  PayPal just did this to more than a few people using a shotgun approach to see if they could collect money on old accounts, not bothering to check to see if the accounts were fraudulent or not.

Example 1

Examples 2-???

At this point I feel very let down by the system and want to report this to a goverment agency for help, but I don't know who to turn to for help.  The FBI clearly does not have time to deal with this type of thing and I don't think they should as they have their hands full with things much larger than this dispute.  However, I want to make sure I am putting this behind me this time.  Any suggestions would be helpful for a direction to turn.

Thanks in advance for any help.