PayPal permanently limited our business account for no reason and is illegally holding our money

[hannah2712]

Hello,

First of all, please be advised that we are already working with a solicitor to build a case against PayPal for fraud.

We're a very small business and we've been selling products on our website for the past 1 month. Initially, the PP account was a personal one and was 'transformed' into a business one as this was the right thing to do considering the sales volume we started experiencing.

A week ago, PayPal sent us an email that we needed to provide additional information about our business to lift certain limitations. The information was provided immediately. However, there was no reply from PayPal. Instead, they asked for more information, such as a description of the business, the most recent bank statement, etc. Once again, all the information was immediately provided/submitted for review. Up until today, I contacted PayPal every few days to ask when the case would be reviewed and they assured me it would be as soon as possible. I kept checking the status of the limitations and all documents were showing was pending review from PayPal. I also tried phoning CS, but the centres are closed due to the COVID-19.

This morning I have received an email that our business account was permanently limited due to a violation of PayPal's Acceptable Use policy. I have reviewed the policy (available here: https://www.paypal.com/uk/webapps/mpp/ua/acceptableuse-full) and our business DOES NOT violate it in any way. We don't sell any of the products listed in the policy, which makes the permanent limitation unfair and illegal. At this point, PayPal is illegaly holding over 25K.

I messaged them this morning but I am yet to hear back. It also appears that SOMEHOW all messages exchanged with PayPal have disappeared from my account. All messages asking when the case would be reviewed etc. It is extremely strange and rather fishy, isn't it? The only message showing in my Message Centre is the one I've sent this morning.

Please note that we can provide proof of fulfillment for every single one of our orders. We have tracking numbers for all of them and customers who emailed us that they were happy with our products.

How has PayPal deemed that our products are prohibited and that our business is violating the Acceptable Use Policy when the products we sell are completely different from what counts as 'prohibited' and cannot be even remotely considered as such? Why hasn't PayPal reviewed all the documents we provided despite having repeatedly contacted them to ensure everything was alright?

Our solicitor has already informed us that our products or business practices are in line with the policy and that there has been absolutely no violation on our part. We are paying them extra to expedite the processes and build our case against PayPal, especially since there is clearly malevolent intention from them. After all, they refused to review our documents (which the solicitor said are in perfect order and acceptable) and then permanently limited our account without any real basis for doing so. They'll also be submitting all relevant information to the Ombudsman.

Once again, we're a small business and wouldn't normally afford court proceedings. But this is unacceptable and we'll be doing everything we can to make sure PayPal will be held accountable for their actions. At this point, because of PayPal, we are literally left out of pocket and we find ourselves unable to pay back the loan we have taken out because that money is being blocked by PayPal for another 6 months. We'll also make sure that the person responsible for permanently limiting our account will be appropriately sanctioned.

Unless our account is immediately restored, we will continue with court proceedings and we will most definitely claim a hefty compensation from PayPal for their fraudulent actions.

Best regards.

[phamhoanghai180]

Any update ? 

[hannah2712]

No update whatsoever, at least not from PayPal.

Their Twitter customer support rudely informed me they're not legally obliged to provide a valid reason for the permanent account limitation and they can just hold our money for 180 days without any explanation. Sweet.

Our solicitor has submitted all relevant information to the Financial Ombudsman. They've advised not to take it to court before hearing back from the Ombudsman as it might affect our case. If the response isn't satisfactory, then we'll pursue it further.

He says our case is pretty solid, so... 🙂

I'll happily update the topic once I know more.

[jom11don]

Hi I hae just been "banished" from Paypal also just today.  I also recently opened an account business was doing great then they asked me to provide information to confirm my identity I did it all. they requested my suppliers invoices I supplied that. they requested information on my customers (tracking numbers and address for specific customers, i supplied those. They also receive the tracking Numbers showing delivery of product to the specific customers. 

I have been waiting for the past two weeks for response. Today I was informed that i was not following guidelines. and that Paypal cannot provide me to use their services anymore.  In addition I will not be able to get any of my funds for the next 180 days!

Again there was no explanation.  They are not taking my calls. 

Something has to be done. Our livelihood depend on these online businesses. 

[hannah2712]

@jom11don Exactly, and we have already filled a complaint with the Financial Ombudsman. We're waiting to hear back.

I strongly advise you do the same (and claim compensation for the distress they're causing you). Holding anyone's money is illegal.

Will update this thread when I hear back from the Ombudsman. 

[ChrHan8]

Hi @hannah2712,

Could you update on how this went with the ombudsman?

I'm currently in the same boat and don't know what to do.

Thanks

[teaspoon_66]

Holding my money also. 

Has anybody had any success with a limited account?  How long did it take?  

[hannah2712]

Hello everyone,

Apologies for taking so long to reply!

First of all, PayPal refused to provide the final response letter required by the Ombudsman to proceed with the case despite numerous attempts to request/obtain it. It took PayPal a few months to provide it and only after it was requested directly by the Ombudsman.

In their final response letter, PayPal said they'd allow me to withdraw my money as a final solution -- and to refer my case to the Ombudsman if I wasn't happy with their resolution. I never replied to their email, instead I provided the letter to the Ombudsman so they could proceed with the case. Interestingly, 2 weeks later PayPal allowed me to withdraw my money. HOWEVER, my withdrawing the money did not constitute an acceptance of PayPal's resolution because I did not reply to their email (which was confirmed by the Ombudsman). So at that point I had my money back (albeit when the 180-day hold was nearly up) and the Ombudsman was also able to proceed with the case on my behalf.

I heard back from the investigator a week ago and they should be ready to provide their solution very soon. I obviously don't know if they're going to ask PayPal to pay us additional money since they caused us a great deal of distress + substantial loss of income FOR NO REASON AT ALL. I'll update this case when I know their decision. All I want is for PayPal to be shown that they can't just do what they please with no consequences. 🙂

If you're going to pursue this with the Ombudsman, please try to obtain the final response letter as this will delay your case resolution (like in our case).

Best of luck! 🙂