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I have been selling digital goods on my account for about 18 months now. The items are for use on my various websites and everything has been running smoothly. Customers are happy, there are of course the occasional refund as with any business and confused customer. However, I am also careful to make sure all complaints are handled and most of the time things are sorted out in less than 48 hours.
Today I wake up to find that my account has essentially be locked. I can not take payment or remove the $3000 sat in my account.
Calling PayPal I was told that I would have to email PayPal in order to find out what is happening and why and I could not be transferred to the department that would be handling the issue.
This is the message I received:
When I click the notification it cycles me back around to the same warning message.
Needless to say, I am rather annoyed.
Solved! Go to Solution.
Ok, so a little update on my situation. I have been a doing a little research and it turns out that Paypal can ban (permanently limit) your account as and when they feel like it, but it is essentially a full ban and they are highly unlikely to remove the ban. However, hold funds for any longer than 10 days is actually illegal in many states, but needless to say, Paypal seems to willingly ignore the law in favor of profiting from held funds. And just last year a class action lawsuit won in favor of the people and Paypal was fined $4million - https://topclassactions.com/lawsuit-settlements/closed-settlements/306260-paypal-account-hold-class-...
This means that with a little bit of pressure in the right direction, the funds should be unlocked in a timely fashion. Failure do so with an email shot off to the right authority will result in another fine for Paypal. With that in mind, I sent the following letter to as many high ranking Paypal employees as I could find emails for:
I am respectfully requesting that the hold on my funds/account be lifted. I am not necessarily requesting that my account is re-opened or allowed to continue to use the PayPal service, as I have already taken my business to your largest competitor and I am no longer in need of PayPal’s services.
I have previously requested a review/appeal of my case which was denied. Although I still disagree with the decision to deny my appeal I will abide by it – however because I feel that holding my funds for 180 days for a non-fraudulent violation of PayPal’s Acceptable Use Policy is excessive, and perhaps a punitive abuse of power.
In light of the recent class action lawsuit: Zepeda v. PayPal Inc., Case No. 5:10-cv-02500 SBA, I will be filing complaints with the appropriate agencies on Friday morning, December 7th, 2018 if I am not satisfied with PayPal’s response to this request to release my funds:
I understand PayPal’s need for holding funds for credit card chargeback purposes, however, a review of my account history for the last year will reveal a very low chargeback rate as well as a very high customer satisfaction rate. I feel that any reasonable person would conclude that holding my entire balance for 180 days is excessive and may be viewed by some as punitive or as already stated, an unnecessary abuse of power and perhaps even contrary to the law. That being said I have no problem with and agree to leave a balance of $200 for credit card chargeback purposes for the duration of the 180 days. I feel that this is a fair resolution while still leaving PayPal with the means to charge back any future credit card disputes to my account.
Please be aware that replying with the standard “this is part of the terms of service that you agreed to” will not satisfy my request, or deter me from filing my complaints on the morning of Friday, December 7th. It will be up to those agencies to determine if PayPal is operating within the law, abusing power, etc. I am simply seeking a resolution that is fair and in the best interest of both parties.
Thank you for your time again in looking into this matter.
And now I wait 🙂
Here people are having the same issues. I think its time we reach out to the UNITED STATED ATTORNEY GENERAL since this falls under consumer protection laws.
theres so many ways to collect your money from clients and sales without using paypal so its “banning” at will is not the issues. Its the holding money for merchandise after we’ve sold and shipped it. Its essentially theft!
**GOOD LUCK TO ANYONE DEALING WITH THIS SAME ISSUE ✌🏼👍🏼