Available funds that I can't spend or withdraw

[AvailableFunds]

I received a payment of over $4,000 which cleared immediately to my suprise. I then began using the funds like any reasonable person would assume you could. Two days later I receive a payment for $1,100 which sends a security alert on my account and freezes not only the new 1100 but the remaining balance from the 4000. The first Rep says I see the problem I'm lifting the security alert - nope transaction declined. The next Rep explains it can't be lifted just wait 24-48 hours. All the while each rep is saying your funds are available. But every transaction is denied, no atm withdraw, can't pay a bill online, even a pack of cigarettes at the gas station - Declined. Even though every rep said the card should still swipe because the funds are available. Being denied publicly at the ATM and cash register is quite embarrassing. Not to mention today was my wife's birthday which I planned to take her shopping. Good thing I attempted to withdraw cash and got embarrassed by myself. Imagine us standing at the mall getting declined because I have available PayPal funds which aren't usable. No email to notify me. No phone call. No holds on the account. No reserve issues. Just available funds that can't be accessed. Explain how this works? Becuase the PayPal explanation of You attempted to withdraw your available funds too soon so it's a security flag.............. Why make it available and the penalize me for using it? Lastly why no call, text, or email? Do they really need the small amount of interest that money will accumulate?

[DPCreations]

There are many factors to the risk and regulatory models which PayPal uses for account security.  PayPal does not disclose these controls, also for security reasons. 

The senders of the funds are important as are the location of the funds origination.

The destination of the funds after you receive them also matters when it comes to govvernment financila regulations.

Without knowing all of the detials of your transactions there is no way to offer specific speculation.

[sadieb811]

I understand your pain, but mine is more on the credit side.

After having issues myself and reading all these other stories there is one theme that keeps popping up:

First, Paypal is not a "credit company" even though they want to be in the credit business to pad their profits with well margined credit products.  But Paypal doesn't want to have to refund people money or, god forbid, have to take a potential loss due to fraud like a real credit company would do.  So, Paypal gets to deny and withhold your money how and when they want and there is basically nothing you can do about it.

And for some reason, this is acceptable since no one has any true recourse.

Apparently, this is the compromise we have all agreed to upon signing up for a credit service provided by a technology company rather than a credit service provided by a financial company.

I've actually begun asking some legal colleagues questions and a lot of them are saying it shouldn't matter what type of company they are and that if they offer credit products, or are posing as a financial institution, that they should have to work just like a Visa (regarding credit) or just like a bank (as per your circumstances).  The only change these legal experts told me that may be detrimental to some is that they would have to regularly report to crediting agencies, which would be fine by me (excluding their credit cards obviously, they already do this).