Consumer complaint received 2023-07-19
Company: Paypal Holdings, Inc
State: NJ
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Deposits and withdrawals

Complaint:
I have owned and maintained a personal PayPal account and linked PayPal-issued debit card through which I conducted legal personal business and part-time freelance transactions for several years. 

Without warning, on XX/XX/23, I received an email from PayPal stating the following : You can no longer use PayPal After a recent review of your activity, weve permanently limited your account in order to protect PayPal and the security and integrity of the network of buyers and sellers that use PayPal services. This is permitted under the PayPal User Agreement sections titled Prohibited Activities and Restricted Activities, Holds, and Other Actions We May Take. Going forward, you wont be able to use PayPal to send and receive money or shop online.

Per the User Agreement, when PayPal permanently limits an account, any money in that account is held up to 180 days. Money in your balance can be used to satisfy your obligations under the User Agreement. After 180 days, if applicable, we'll email you with information on how to withdraw any remaining money from your PayPal account. 
Note that should any chargebacks, PayPal Purchase Protection claims, or other reversals result in your account balance falling below zero, then you will also need to settle the amount owed to PayPal to avoid further action. 
Customers whose accounts are permanently limited are not permitted to use PayPal service and are not permitted to open new or additional PayPal accounts.

You can find the complete PayPal User Agreement by clicking Legal at the bottom of any PayPal page. 

I immediately contacted PayPal support via their phone option and talked with a customer service representative who stated that there was no further information that they could give me about the issue but that my account was under review and I would receive further information after 72 hours. I also requested to be transferred to a manager, who agreed to escalate my case and send it to the back office for swifter review, with the hopes that I would receive a reply within 24-48 hours. Both the representative and manager reiterated that there was no further action that I could take and no one additional to speak to, and that furthermore I would be unable to access any of my funds because my entire account with all of the money was locked until the review was complete. The manager was especially apologetic, informing me that there was no suspicious or illegal activity or obvious violations that he could see on my account and that he was unsure of why PayPals algorithm had locked my account but that I would be sure to receive an answer through email after the back office was conducting their review. 

In the meantime, I reviewed the PayPal legal documents online and could not find any clear reason that would flag my account as suspicious, illegal, or in violation. 

The following day, XX/XX/23, I called again to follow up on the case and was informed by a customer service representative that there was no update on the case and no way to further escalate the situation. They did agree to transfer me to a manager to verify the information. Upon speaking to the manager, he informed me that everything that I had heard from the other PayPal representatives was incorrect and that my account was not under review, I would not be receiving any type of email or information regarding the situation, there was nothing further I could do, and there was no one further that I could talk to. I asked about the legalities of PayPal being able to freeze my account and hold onto my hard-earned money without being willing to provide me with a reason and also refusing to discuss the situation with me, and he furthermore stated that PayPal had every right to do so under the user agreement and was not obligated to tell me anything about their decision. When I pressed again about the reason for locking my account and holding my funds, and that I was willing to provide any personal documentation or other information as needed, he stated that he was not authorized to provide those details to me and that there was no one else that I could talk to who would be able to provide that information to me. My head was spinning at that point, so I said that I would call back again to discuss the situation and the manager stated that there would be no reason for me to call or contact PayPal about the situation any more because the decision was final. So I asked what would happen at the end of the 180 days, if my funds would be returned to me or if PayPal would steal everything from my account without providing me with a reason and without being willing to explain anything to me. The manager stated that if PayPal took my funds it would not be considered stealing because it would be within their legal right to do so. I had nothing further to say or ask at that point, finding him completely unwilling to negotiate or assist me, so I ended the call.

Company response to consumer: Closed with non-monetary relief