I have used PayPal to collect payments from mostly local customers for my IT, electronics, and parking space rental businesses. A while back I suffered a tragic injury and my PayPal account was closed with a negative balance of about $700 USD. Last May a customer who I know personally sent me $180 by mistake. We both agreed that I would refund the payment immediately. However PayPal applied to funds against my negative balance even though a message was sent to the customer that my account is no longer active. As I am trying to get back on my feet with my business, this has deeply harmed my reputation amongst local customers, since it appears as though I have cheated the buyer out of $180. I called customer service who assured me they would simply refund the buyer, and to wait about a week. Instead PayPal has kept the money. It is not the buyer's fault that I owe PayPal money and I am trying to work out a plan to repay PayPal, and this oversight makes it much much more difficult.
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