Someone stole money from this Virginia mom's PayPal. Then PayPal penalized her: 'This can happen to you'

RICHMOND, Va. -- Busy with a move and a job change, Sarah Tocco does not have much time or money to spare. So, when she woke up on March 15 to multiple notifications from PayPal stating her account was frozen due to suspicious activity, she became concerned.

“A Capital One savings card was added to my account that was not mine. The phone number was not mine,” Tocoo said.

Tocco said the $800 in her PayPal account she earned from selling furniture was gone, and “they got money out of my banking account, my credit card.”

She also noticed money had been transferred to her account from other PayPal users, and then funneled onto the Capital One card that was added to her account.

“I saw all this and immediately filed a fraud report with PayPal and highlighted all my money being taken,” Tocco said.

Adam Rust, who heads up financial services for the Consumer Federation of America, reviewed Tocco’s situation and said he believed it was clear fraudsters took over Tocco's account.

“So that person was able to get into the site and change some of her profile information and use that to order fund transfers,” Rust said.

But, Tocco said she did not receive the help from PayPal that she expected.

“I was really stuck, which is kind of when I reached out to you guys,” Tocco said.

Turns out, another victim had filed a fraud report after noticing some of their money had been sent to Tocco’s account.

She said PayPal then penalized her.

“They took $295 out of my account pushing me into a negative,” Tocco said. “The next morning I received the email stating they had done their investigation, they had found no fraud, there was no unauthorized use, and it was consistent with my PayPal history, which it certainly wasn’t."

Tocco filed an appeal and was again denied.

“They determined there was no unauthorized use in my account,” Tocco said.

She tried another appeal but again, “they did a review of my account, they found that it's secure and it has not been accessed by a third party.”

Every time Tocco said she tried to call the company to talk to someone who could help, she said she got nowhere.

“I’ve wanted to throw my phone across the room several times. I was saying if we weren't trying to sell this house, I would probably be punching holes in the wall,” Tocco said.

“What does this make you think about the way PayPal handles their fraud investigations?” CBS 6 investigative reporter Melissa Hipolit asked Tocco.

“They're not listening, and they're not protecting their customers,” Tocco replied.

“Do you recommend people use this site?” Hipolit asked.

“No not after my experience,” Tocco responded.

She ultimately filed a fraud report with the Federal Trade Commission, as well as a consumer complaint with the Virginia Attorney General’s Office.

“I just want to caution everyone that this can happen to you at any time no matter what your security measures are, and it doesn't seem like it's going to be resolved easily through PayPal,” Tocco said.

Hipolit contacted PayPal immediately upon hearing from Sarah Tocco, and reputation manager Kayla Gill responded.

She said she would look into Tocco’s situation.

Within hours, Tocco said she got a notice that PayPal had detected fraud on her account, and nearly 300 dollars had been refunded to her.

But, that was not even close to the full amount Tocco had lost.

So, Hipolit reached back out to Gill, and she had someone from PayPal reach out to Tocco to hear her full story.

After that, PayPal started refunding all the money she lost.

“When I did speak with the executive customer service representative she was very professional and helpful, I just wish it hadn't have taken so long and with so many other measures to go around getting it,” Tocco said.

Hipolit asked PayPal why, before she got involved, they repeatedly found no fraud on Tocco’s account, and even charged her for the fraud perpetrated against her.

“It wasn't until you got involved that suddenly they recognized the fraud,” Tocco said.

PayPal said it could not comment on her specific situation due to privacy issues, but said its customer support agents review each situation on a case-by-case basis and strive to help any customer experiencing challenges to resolve their issue.

They added that PayPal takes the security of their customers and their information very seriously, and they have a zero-tolerance policy for attempted fraudulent activity, and they work tirelessly to protect customers.