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Does PayPal automatically remove funds from the seller's account when the buyer opens a dispute?

maicart
Contributor

Does PayPal automatically remove funds from the seller's account when the buyer opens a dispute?

I recently opened a dispute on a payment, but finally reached an agreement with the seller and closed the dispute.

However, the seller says that PayPal has removed the funds from his account.

Is that the correct procedure? Does PayPal momentarily retrieve the funds from the seller's account and then sends them back when the dispute is closed?