Danger! PayPal account blocked. What to do?

Hello everyone - This is an experience report on account blocking at PayPal

In the recent past I have faced three suspensions of my PayPal account - twice for alleged violations against the General Terms and Conditions (GTC) and once with prior notice. In this post, I'll share my experience with the process, how I went about it, and what steps you can take if you have similar issues with PayPal.

PayPal plays a central role as a payment service provider, managing over 300 million accounts worldwide. The platform is known for its ease of use and security. But what if the PayPal account is suddenly blocked?

In this post, we share our personal experiences with repeated account suspensions by PayPal and provide a comprehensive guide on the steps you can take to combat such suspensions.

My experience with PayPal: Chronology

First blocking: On February 2, 2021, we experienced the first suspension of our PayPal accounts. The reason was an alleged violation of PayPal's Acceptable Use Policy (AUP) due to copyright infringement. Despite clear evidence that our services had never violated the rights of third parties, our objections were ignored by PayPal. For several weeks we tried to find a solution through emails and telephone inquiries, but were met with considerable resistance and unfriendly employees.

Second and third blocking: After a successful complaint to the banking supervisory authority CSSF and the temporary unblocking of our accounts, they were blocked again in the following months, each time with the same reasons as the first time. Despite assurances from PayPal that the matter had been resolved, we experienced a rollercoaster of emotions and administrative challenges.

• 02.02.2021 : All PayPal accounts blocked (1st time) (AUP violation – copyright infringement).
  – Weeks go by –
  Objections rejected, employees on the phone sometimes very unfriendly.
  A notice: Our service has never violated the rights of others.
• April-May 2021: Complaint to PayPal was unsuccessful. Subsequent complaint to the banking supervisory authority “CSSF”.
• 08.08.2021 : Re-examination of PayPal (since contact was made via banking supervision) – Release of accounts obtained
• August September : Contact PayPal so we can make sure you don't get blocked again. Customer support communicates several times (3 times in total) that the situation has been clarified and there will be no further blocking
• 25.09.2021 : Re-blocking (2nd time) (AUP violation - copyright infringement. Same reason.) Employees haphazard, blame it on the PayPal algorithm, objections were rejected without comment. We feel deceived and write another complaint to Executive Escalations with a new announcement about contacting the CSSF. The employee who knows my case also writes internally to this department.
• 08.10.2021 : “Your account has been temporarily restricted” email. Accounts released again, until December 8th. This email was sent to all my accounts:
  Hello Lucas Kleipödszus! We recently conducted an audit of your use of PayPal services based on our records. Given the nature of your activities, we have decided, in accordance with the PayPal Terms of Service, to terminate our relationship with you upon two months' notice. For this reason, we will place a permanent restriction on your account on December 8, 2021. You can view the full PayPal Terms of Service by clicking on “Terms and Conditions” in the footer of any PayPal page. We encourage you to read all notices Remove PayPal from your website. This not only includes the removal of PayPal as a payment option, but also the removal of the PayPal logo or shopping cart. If you have remaining credit, you can withdraw the money to your bank account. Information about debiting your PayPal account can be found in our Help Center. Best regards, PayPal
• 08.12.2021 : Re-blocking (3rd time on time).

Dealing with PayPal: A critical look

Our experience with PayPal customer service was mixed. While we encountered some dedicated employees, most of our contacts were characterized by a lack of helpfulness and inability to offer concrete solutions. Communication with the AUP department was unsuccessful and our attempts to clarify the matter were ignored.

Recommendations for those affected

Based on our experience, we recommend the following steps if your PayPal account is blocked unjustified:

1. Persistence pays off: Contact PayPal Support regularly through all available channels. Even if the first reaction is not satisfactory, keep at it.
2. Document your communication: Keep a record of all correspondence with PayPal. This includes emails, letters, and phone call notes.
3. Legal advice: Consider consulting an attorney, especially if significant amounts are being withheld. Legal representation can help you assert your claims more effectively.
4. Complaint to supervisory authorities: File complaints with relevant financial regulators, as we did with the CSSF in Luxembourg. They can put pressure on PayPal to force a review of your case.
5. Alternative payment service providers: Consider using alternative payment service providers to minimize future risks.

PayPal – Support Hotline: 069 945189832

Reading bad reviews about PayPal online

There are a lot of complaints about PayPal on online review portals. On Trustpilot The company has 1.2 stars – 85% of the ratings are “unsatisfactory” (as of March 12, 2021). In general, it is often reported that accounts are arbitrarily frozen and for 180 days (sometimes longer). Customer service is also criticized because it is said to be difficult to reach or unable to help at all in some situations. PayPal's German support makes every effort, but unfortunately their hands are tied when it's blocked. You can't reach anyone on the phone to remove the block. You are always referred to an “internal specialist department”. In general, there are complaints about the company's poor accessibility and lack of communication on the Internet.

Account blocked without notice – not uncommon with PayPal

One morning we received an email that our accounts had been 'initiated for closure'. All of our money will be withheld and we will never be allowed to use PayPal again. After initial confusion, this was confirmed to us after a telephone inquiry: the accounts are permanently restricted and the business relationship “has been terminated”. Why? Violation of the Acceptable Use Policy. Allegedly. And now? The PayPal account is blocked.

“Account closure initiated” – money withheld for 180 days

At the beginning of February 2021, all of our accounts - including private ones - were frozen and rendered unusable. Send, pay or collect money? None. An automated email states that PayPal can hold the money for up to 180 days. In the terms of use PayPal states that the money will be withheld for up to 180 days may in order to prevent liabilities and minimize PayPal's liability risk. We don't know whether this is legal - but it is written in the terms and conditions. In general, we recommend leaving as little money as necessary in your PayPal account so that you don't have to chase after your money. The ban came very suddenly without any consultation or communication with us, which is why it came as a big surprise to us.

PayPal customer service

PayPal's telephone support is repeatedly criticized. We have rarely had bad experiences with the company's telephone customer service. On the contrary: the majority of employees were very committed and took the time to examine the situation. Unfortunately, the employees couldn't solve anything on the phone themselves; they always referred to the back office or didn't have permission to see the reasons for the blocking. Nevertheless, they did everything that was necessary to help us. The commitment was always there.

Particularly worthy of mention is the business customer support (Business Support from PayPal), which was always very committed at all times.

After 7 months: Accounts restored

On August 9th, 2021, after more than half a year, our business account was released again. After another three days, on August 12, 2021, the private account and another business account followed. It all took a long time, and we were not informed of the conclusion they came to – But apparently the ban that was once placed because of alleged “violations” has been withdrawn.

09/25 : Re-banning all accounts

On Saturday, September 25th, 2021, ALL accounts were blocked again. Same reason – same procedure. To be honest, I feel ripped off. Unfortunately, you can only imagine what the whole thing is doing to me mentally. I will now take the route of contacting the banking supervisory authority again and then possibly take legal action against PayPal. It can't be the case that we are first unblocked and then, despite every effort, blocked again out of the blue.

Despite contacting Business Support and PayPal via email etc., our accounts were blocked again. Enough is enough now! We are now taking another stand on the Luxembourg Banking Supervision (CSSF) and will take legal action if necessary.

October 8, 2021: Re-release + termination of accounts

The accounts were all released again, with written notice of termination (2 months' notice). If that had happened at the beginning, we wouldn't have made any complaints. But we don't want to accept this termination as the whole process has been very time-consuming so far. We no longer use PayPal for business purposes!

Here is the cancellation:

We recently conducted an audit of your use of PayPal services based on our records. Given the nature of your activities, we have decided, in accordance with the PayPal Terms of Service, to terminate our relationship with you upon two months' notice. For this reason, we will place a permanent restriction on your account on December 8th, 2021.

You can view the full PayPal Terms of Service by clicking “Terms and Conditions” in the footer of any PayPal page.

We request that you remove all references to PayPal from your website. This includes not only the removal of PayPal as a payment option, but also the removal of the PayPal logo or shopping cart.

If you have remaining credit, you can withdraw the money to your bank account. For information about debiting your PayPal account, please visit our Help Center.”

Conclusion and outlook

The experience of having our PayPal account blocked was not only frustrating, but it also shed light on the position of power that PayPal holds in digital payments. While PayPal remains an indispensable tool for online transactions, it is important to be aware of the risks and take appropriate precautions.

One more thing: Be careful which big companies you trust. Read the PayPal reviews and be aware that PayPal at any time

1. can block your account (also repeatedly),
2. can withhold money,
3. can collect money from your PayPal account (AUP Violation Damages*),
4. can change the terms and conditions/AUP at any time
5. has a strong market position and can exploit it.

*PayPal usage policy here: https://www.paypal.com/de/webapps/mpp/ua/useragreement-full#actions-restricted-activities

We would like to point out that this article/contribution is based on our experiences and that there are also many other opinions about the company “PayPal”.

Has your PayPal account been blocked? Feel free to comment on the post.

We hope this post will help other users who experience similar issues with PayPal to make informed decisions and combat effectively