I know this has been covered over and over, but I always thought there must be more to the story when someones account was permanently banned. Well, it happened to me, one of the most plain and boring consumer users of PayPal ever.
I have used PayPal for over a decade, usually once or twice a month to make small purchases when buying something off Craigslist or Facebook marketplace. I also occasionally use it to split dinner with friends. I don't use it for business and I don't use it for anything sketchy.
I recently received an email from PayPal saying that my account had been permanently banned. No appeal, no reason given. I logged in separately to make sure this was a real email, at first I thought it must be phishing. It was real.
The only thing I can think of which might have precipitated this. I got a few invoice requests though PayPal a while ago from people/businesses I had never heard of. This is a well known and documented scam where they spam invoices en-masse and hope some people pay them accidentally (I did not pay them, but the PayPal UI makes this very easy to do and there is no way to decline or dismiss the requests).
Not a big deal for me since I don't use PayPal for anything critical, but I figured a reminder was in order in case anyone still thinks it won't happen to them. If it could happen to me, it can happen to anyone.
by GTP on 2/23/23, 7:24 PM
by idiotsecant on 2/23/23, 6:48 PM
This happened to me when I was using paypal income to pay my rent while I was in school. They only locked up a few thousands dollars but that was life-or-death kind of money for me at the time. Taught me a very expensive lesson about never keeping money in paypal and never giving paypal your bank information. USe credit cards as your buffer between paypal and you. Paypal is like fire - you can harness it usefully, but it will burn you if given the chance.
by napsterbr on 2/23/23, 6:51 PM
by shortcake27 on 2/23/23, 7:20 PM
I don’t understand why PayPal isn’t regulated like a bank. You’d think after thousands of horror stories where PayPal literally steals people’s money, someone would step in and enforce them to provide a minimum level of service when closing an account, ie a way to get your funds out.
by latchkey on 2/23/23, 7:36 PM
by arthurcolle on 2/23/23, 5:33 PM
I know PayPal spun out of Ebay a long time ago and that PayPal is
especially evil and sociopathically unscrupulous but...
EBay just banned my account last week for listing a Macbook Pro with stock image, removing it to adjust the title, relisting it with a photo of the "About this Mac" to show that the specs were correct. (Can't think of anything else that would even be remotely related).
Also, the messages component of the Ebay web app was completely down the whole time so it made it impossible to respond to any users that were asking questions about the MacBook Pro. Completely insane. Apparently making listings is "harmful to the [Ebay] community"
by jake_morrison on 2/23/23, 6:39 PM
by opportune on 2/23/23, 9:46 PM
Maybe I am just too young to understand PayPal’s history and place in the payments world, but it seems like it’s really a nightmare payment platform with only one major benefit: it’s very friendly to issuing chargebacks to purchasers.
With that in mind, it doesn’t even make sense to me why payment receivers accept it, because there would be huge adverse selection in who uses PayPal - if the only value add is that it makes it really easy to chargeback, your customers using it are probably much more likely to chargeback.
Of course chargebacks can be justified, but they can also be used to steal things. In the old school internet where everybody was afraid of handing over credit card details it might have made sense to use PayPal - maybe it still does in countries with low CC adoption - but it doesn’t seem to be generally useful outside of that context, except for chargebacks.
And then on top of the chargebacks you get all the jank inherent in a really old legacy product working in a regulated space, that is also integrated with tons of other payment platforms owned by the same company, which likely share a lot of policies/code in a way that creates tons of bugs and edge cases.
by zachlatta on 2/23/23, 5:57 PM
by bbarn on 2/23/23, 9:30 PM
This problem will only go away with regulation. Sadly the minds in our industry are so focused on "disrupting the system" that little progress has been made. In the US, Venmo, paypal, etc. are still a thing and in most of the world - they simply aren't. Government regulated banking and an interchange standard is the way to go here. In Iceland where I previously lived, anyone could transfer reasonable amounts of money to any other person for free, through a government run banking system, regardless of what bank you had. I am normally against government intervention, but this is a case where a single standard and rule actually makes sense. The only people it doesn't make sense to are those trying to circumvent fees which should only be applied to business transactions. The argument against it is the cost to transfer money internationally, but.. those same benefits are the problem with systems like this - no regulation
by unxdfa on 2/23/23, 7:30 PM
If your money isn't in either cash in your hand or in a fully regulated bank somewhere then you're probably fucked.
When doing business I expect to be paid by direct bank to bank transfer, regardless of how small the amount is. Even between friends, we send bank transfers. No cheques, no 3rd parties, no escrow.
by irthomasthomas on 2/23/23, 8:20 PM
by rqtwteye on 2/23/23, 7:41 PM
It’s nuts that they can ban you without explanation. There should be a regulation that when somebody gets banned that they
* are notified of the ban
* there is an explanation
* some process to appeal
This will get even worse the bigger the tech players get. They can afford to throw a lot of people under the bus because they are only a small percentage of users.
by jawns on 2/23/23, 6:35 PM
In these cases, has anyone had luck getting their money back via either arbitration or small-claims court?
I am sure their user agreement gives them some leeway to hold the funds for some period of time, but I would be surprised if the law allows them to permanently keep the money, with no legal recourse.
by atum47 on 2/23/23, 6:52 PM
I have deleted my account with them based on previous shady stuff they were pulling. Had to create a new account in order to get paid from other websites (turbsquid, cgtrader, thingyverse...)
Most of these websites only uses PayPal as a method of payment, kinda forcing the user to do the same.
by jamiepenney on 2/23/23, 9:53 PM
I will never use Paypal ever again. I created my account when I was still at university, around 2005 I think. They wanted a phone number for verification so I gave them my home phone number (if I remember correctly, they didn't support mobile numbers in my country at this point). Later, they added mobile number support so I added my mobile and moved on. 16 years later, I get a 2FA prompt on login and they will only accept my original home phone number as the phone to use. I haven't had that number for 13 years at that point, there was no way to use it. I called them and asked if I could verify with _any_ of the other numbers on my account but they refused, and said the only thing I could do was close the account.
Luckily the only subscription linked to it was my Nintendo Switch online account, and that was easy to fix. I didn't have any funds stored in the account luckily, but there's no way I'm risking anything else with them given the experience I had with customer support.
by mortigi on 2/23/23, 7:11 PM
I can't think of a business I've worked for where PayPal hasn't done something like this in some way. Best thing I can recommend is complain to your state regulatory agencies. Even a one week suspension can be a major headache and revenue hit. It's incredible to me that they haven't been hit with more scrutiny given US banking regulations.
by trident5000 on 2/23/23, 6:52 PM
Happened to me. I did absolutely nothing nefarious; I'm the most boring person you can imagine. It was clearly some internal logistics they screwed up. When I called them they said "they couldnt tell me the reason why" and that was that.
by breck on 2/23/23, 7:05 PM
And people say crypto is a scam.
The truth is trust no banks—I had Mercury Bank and First Republic help someone steal over $120,000 from me—I'm not kidding!
Trust no one-distribute your money in lots of places so if one is crooked you are not dead.
by paulpauper on 2/23/23, 6:27 PM
People have been warning against keeping too much funds in PayPal since 2004. Consumer protection is nearly nonexistent.
by christkv on 2/23/23, 6:43 PM
If you are in Europe most countries let you bring them to small claims court if you have funds trapped in the account.
by astura on 2/23/23, 7:18 PM
>small purchases when buying something off Craigslist or Facebook marketplace
Seems like this is might be the case of it? I'd imagine one of these people turned out to be scamming people they'd ban accounts that have transacted with them?
> I don't use it for anything sketchy.
Sending money to strangers seems sketchy to me. I certainly wouldn't
do it. shrug
Anyway, PayPal isn't "special" - you risk being banned from literally any financial institution for seemingly no reason. You can read a million stories about people being banned from credit cards and banks online.
by MadSudaca on 2/23/23, 7:12 PM
I’m gonna be that guy: cryptocurrency fixes this.
by marcrosoft on 2/23/23, 8:08 PM
I can’t believe people still use PayPal in 2023. They’ve been known to be terrible for like 15 years.
by amelius on 2/23/23, 6:50 PM
by motohagiography on 2/23/23, 8:08 PM
To close my account, I emptied my balance into a random purchase, and I still want to close my account, but because there are a few dollars in it, they won't close it without a bunch of additional PII and hoops. I don't care about the money, I really just want zero risk exposure to them in my life.
Maybe I should just try to get banned instead?
by orangesite on 2/23/23, 7:59 PM
Thank you for the overdue reminder to finally get round to deleting my old paypal account!
(Not that they make it easy, mind you)
by supernova87a on 2/23/23, 9:41 PM
I was just commenting to a colleague about how ridiculous it is to still have a US payment/checking system that allows "pull" transactions from anyone with your account numbers, rather than a "push" system where you explicitly have to authorize sending money from your bank accounts. Like every other modern country you might think of.
Our ACH system (plus the uncertainty of money clearing, holding periods, fraudulent checks / debits) creates such bad side effects for everyone, this PayPal situation included.
I know there are some efforts to initiate a Fed-administered transfers system, but have no idea how it's going.
We (with US government as a mediating authority) don't seem to be in control of having an effective banking system, and it's just getting more confusing over time.
by donatj on 2/23/23, 6:39 PM
I get a ton of those fake invoices. I hope and suspect that isn't reason enough to ban an account.
by puntofisso on 2/24/23, 12:17 PM
I reported about my own similar experience a few years back (
https://puntofisso.medium.com/paypal-closed-my-account-with-...).
What's really stuck with me is that it seems that anti-fraud legislation in many countries allows PayPal and, most importantly, traditional banks to accuse a customer of fraud and close their account without having to provide the actual reason that triggered the anti-fraud checks.
by quickthrower2 on 2/23/23, 9:25 PM
This is whey crypto, for all it’s awful flaws does have an advantage: no one can confiscate funds (by design
) or be allowed to draw down arbitrary amounts.Technical design. Obviously you can be coerced by force
by jmyeet on 2/23/23, 9:55 PM
The problem here is a lot bigger than PayPal.
Consider people who sell through Amazon or even use Amazon for distribution. Amazon can arbitrarily decide you’ve violated their TOS, suspend your account and freeze any funds you’re due for things you may have already shipped.
You may be in limbo for months. It might be impossible to reach a human to resolve it if you’re not of sufficient size.
I get the need to combat fraud but what we have here is a financial incentive for companies to freeze and basically steal your money. Even if you eventually get it back just holding it has value.
That’s a problem.
by annoyingnoob on 2/23/23, 8:16 PM
I got banned from Paypal because I used an expletive in a support email after they removed the requirement that I login before making a purchase (paypal would assume my login status based on cookies or browser fingerprints). I did not ask for that feature and I did not want it - I wanted to have to login each time I use Paypal, I had no desire to remove security features from my account.
Well, I've been better off without Paypal, their ban did me a favor. Paypal will die in a fire of its own making.
by leonewton253 on 2/23/23, 7:11 PM
I recently just closed my Paypal. You have to close your paypal credit accounts before they let you close it. They only approved me for $300, while AMEX approved me for $6000 last year, so not a big loss. They asked why and I said its a garbage service. I tried using it and it could not verify my identity, even though I uploaded a passport picture. I would suggest Stripe or even Coinbase commerce. At least no one can chargeback your stablecoin!
by muhammadusman on 2/23/23, 7:17 PM
I've learned from HN posts over the last 10 years that Paypal and Ebay are two of the worst places to do any kind of business, let alone hold any money there.
by tabtab on 2/23/23, 7:56 PM
It's not intended to replace a bank. For one, bank-related regulations that protect consumers are missing from PayPal. It's best used for buying random nick-nacks, and never keep more than a couple hundred in your PayPal account.
Venmo etc. probably have similar risks.
Use a credit card for more expensive stuff. If you are not able to get a credit card for some reason, I'm not sure what to recommend as an alternative. Suggestions?
by elevation on 2/23/23, 7:54 PM
I'm developing an custom software service for an Australian customer; I'd like to charge them $1-5k/mo USD which I'd need to convert from their Australian currency. As the largest international money transmitter, Paypal is the obvious option, but I hesitate to do business with them because of years of posts like this.
Any other recommendations for invoicing Australians for software/SaaS from the US?
by deterministic on 2/24/23, 8:35 AM
Don’t EVER use PayPal! They will routinely lock your account for 6 months based on a single false claim of your downloadable product not “being delivered”. With zero options to simply reimburse the customer or in any other way resolve the situation. They have done it for years and continue to do it. Don’t use PayPal!
by aintgonnatakeit on 2/23/23, 7:07 PM
Is anyone working on a payment service with escrow, or does another good alternative to PayPal goods and services exist already?
by ninjakeyboard on 2/24/23, 12:45 AM
My new rule for any centralized entity is no more than 5k or 5 hours on there.
Even my bank account has been mostly dumped today.
I'm a crypto futures day trader and have been doing it for a full year 60 hours a week. Sums can start to explode in good market conditions - I just keep drawing stuff and throwing it elsewhere.
by alectivism on 2/24/23, 7:47 PM
You should file an arbitration claim against PayPal (I have done this successfully in the past). My former employer FairShake makes this easy and lends credibility to your claim, otherwise you can go through the process (mailing a demand letter to the dispute address in their terms & conditions).
by rdedev on 2/23/23, 6:59 PM
I had created a PayPal account and tried to use it to get money off from a gift card (read online that it might work). PayPal banned me for it even though there was possibly no other activity in the account. I was able to get it unbanned after reaching out to customer care. For them false positives is just the cost of doing business
by VadimPR on 2/23/23, 7:59 PM
I run an open source project and we're channelling out finds into PayPal. What's a good alternative to switch to?
by blindriver on 2/23/23, 7:26 PM
There needs to be well-defined consumer rights when accounts get banned like this, from everyone of these companies. They shouldn't be allowed to arbitrarily ban without enough proof. They have gotten to the point where they are almost like utilities. Can we create a petition or a California Proposition to get this done?
by cenourinhapt on 2/23/23, 7:20 PM
My advice: Don't use Paypal ever again.
by code_duck on 2/23/23, 9:20 PM
> there is no way to decline or dismiss the requests
I used PayPal as a primary payment source for a business I had 10 years ago. I’m still receiving messages about someone “canceling a payment request” from 2010, so there is definitely a way to do so.
by zesammy on 2/24/23, 10:34 AM
My story, I have created paypal account while I was below the age of their term of service. Let's say 1-2 decade later, I have been requested to provide my ID for KYC purpose. And then my account were banned...
by MrBra on 2/23/23, 10:08 PM
Is it possible to setup PayPal to automatically forward received money to a bank account or a credit card, without allowing them any withdrawal rights on that bank account or credit card?
Would it be safe to use it that way?
by coolgoose on 2/23/23, 8:35 PM
Another year, another story (I could argue another week another story).
Please keep in mind PayPal is NOT a bank, so use it as a transactional service, and that's it.
by Moonman08 on 2/23/23, 8:57 PM
You also can’t report the spam requests via PayPayl’s UI. I received one of those requests, and the only way I could report the spam was via an email. PayPal is garbage.
by kuroguro on 2/23/23, 7:16 PM
> one of the most plain and boring consumer users of PayPal ever
Yeah it seems kindof arbitrary. I've abused my account doing weird stuff for years and it's still fine.
by LegitShady on 2/23/23, 9:44 PM
Stop using paypal period. Just stop giving them money. You don't have to worry about trusting them if you never ever do business with them.
by jiggywiggy on 2/23/23, 9:01 PM
I've heard these warnings about pretty much all payment providers, even stripe, Mollie but also banks.
Not sure anyone you can fully trust.
by more_corn on 2/23/23, 8:06 PM
Had my PayPal account frozen by a tech support person out of spite. 2 week delay. Killed my whole project. Never again.
by jonathantf2 on 2/23/23, 9:57 PM
One thing to take note is that money in PayPal isn't FSCS protected - because it's not technically a bank.
by throw8383833jj on 2/23/23, 7:21 PM
everytime i see something like this I feel disgusted about using paypal. I'll definately sweep funds out of there even more frequently now. financial institutions that don't understand the value of trust, can't be trusted!
by H1Supreme on 2/23/23, 8:14 PM
I just use Paypal as a proxy to a checking account. No funds are actually stored there.
by spzb on 2/23/23, 8:21 PM
People still keep money in their Paypal account? After all these years?
by AussieWog93 on 2/23/23, 8:27 PM
Bizarre. I was a pretty serious PayPal user back in the day (~150k/year through my eBay store) and every issue I ran into was fixed with a 15 minute call to support.
This was 10 years ago, to be fair, but have you tried simply calling support and explaining what happened?
by AlbertCory on 2/23/23, 7:40 PM
I already closed my PayPal because of this and other stuff.
by jononomo on 2/23/23, 6:59 PM
So PayPal just randomly steals people's money? WTF??
by rubans on 2/24/23, 6:14 AM
I had a weird issue with them once.
I sent some money to a colleague's PayPal account who was collecting money for another colleague's leaving collection. I used the name of the colleague who was leaving as the note/reference on the payment.
A few days later I received an email from PayPal asking me to provide the date of birth of the colleague who was leaving and that the money would be held until the request was resolved. They claimed it was to meet regulatory obligations.
I called them and said I refuse to provide the info because I felt it breached GDPR laws and besides, it had nothing to do with them.
The money was eventually returned.
by enahs-sf on 2/23/23, 8:20 PM
What about venmo? Same thing?
by CodeWriter23 on 2/23/23, 8:54 PM
I canceled PayPal after 20 years the day they put out the TOS change to deduct $2500 from customer accounts for posting misinformation.
They subsequently claimed it wasn’t intended to be their policy. And then they said oh yeah it actually is our policy.
by sys_64738 on 2/23/23, 11:45 PM
PayPal should die.
by ofchnofc on 2/23/23, 7:28 PM
> I always thought there must be more to the story when someones account was permanently banned. Well, it happened to me, one of the most plain and boring consumer users of PayPal ever.
That self-exceptionalism? Yeah, most of everyone that hasn't already internalized not to use PayPal will do the same thing you did.
It's futile. Let me guess, do you use a Password Manager (bonus, other than LastPass?)?
Here's another futile one, you, yes, you, really need to make backups and replicate time-snapshots off-site.
by moremetadata on 2/23/23, 7:41 PM
> must be more to the story when someones account was permanently banned
UK banks do this as well, could be anything from having direct debits not sent despite plenty of funds in the account, so you lose things like domain names, websites, to being banned from accessing funds from your account and caught in a regulatory loophole with the banks refusing to talk to you. Their internet surveillance of customers is excellent!
I've been locked out of my bank account for 6 weeks with the banks refusing to talk to me, Cahoot (Satander), GiffGaff are the latest to mess me around, basically they can d546dcddb8d207a80fe40e762023fbee !
Because I remember what the employees of the state did to me as a kid. Scopolamine is used on infant age primary school kids right here in the UK.