Consumer complaint received 2026-04-14 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Trouble accessing funds in your mobile or digital wallet — 
Company: Paypal Holdings, Inc
State: NC

Complaint narrative:
I am writing to formally address a pressing issue concerning a former established PayPal business account. Following the completion of the required steps and submission of all necessary documentation, we successfully opened our account and received notification that it was active and ready for business transactions. Shortly thereafter, we had a customer prepared to make a payment of {$1000.00} for motorcycle parts we were building for him. To ensure that our account was functioning properly, we requested that the customer send the payment via PayPal. He graciously agreed, and upon receipt of the payment, our account was inexplicably locked by PayPal. Subsequently, PayPal requested documentation that had already been provided during the account setup process, along with an additional document to confirm our address. We promptly submitted the requested materials ; however, upon review, we noticed that the submitted documents appeared blurred on PayPals image capture and uploader, which offered no option for resubmission. To our dismay, we were then informed that our account had been deactivated, and the funds were locked for a period of 120 days. In our attempt to seek clarity, we contacted PayPal support via live chat. The representative was unable to comprehend the rationale behind the account 's initial freezing and subsequent deactivation, confirming that no issues were evident with our account information. After a brief hold, they indicated that an appeal request had been submitted on our behalf. While we appreciate their assistance, we conveyed our decision to dissociate our business from PayPal, rendering the appeal unnecessary. We simply requested the release of our customers payment or a refund back to him. Unfortunately, we were informed that the funds would remain locked for 120 days due to potential customer disputes or outstanding obligations. We clarified that given our accounts singular transaction, there was no possibility of any future disputes or financial obligations. This situation is particularly troubling, as our account had been approved and activated, only to be frozen immediately following our first transaction. Furthermore, it raises questions as to how PayPal could collect its processing fees while simultaneously freezing the funds. We have sought resolution with corporate, requesting either the release of the funds to us or a refund to the customer, as there appears to be no legitimate reason to withhold the money. Despite our efforts, we have encountered a series of conflicting explanations regarding this matter. The prolonged nature of this dilemmalasting over two and a half weeksis unacceptable. The PayPal support representative explicitly stated that there was no basis for the account 's deactivation, and thus, there is no justification for the continued lock on the funds. In light of these circumstances, we respectfully urge PayPal to expedite the resolution of this issue by either releasing the funds to us or processing a refund to the customer. This matter requires immediate attention, as I have had to withdraw {$1000.00} from my personal bank account to fulfill our customers obligations and ensure the timely delivery of his motorcycle parts. We believe that a prompt resolution is not only warranted but necessary for maintaining trust and integrity in our business relationship with PayPal. Thank you for your immediate attention to this matter. We look forward to your swift response. Sincerely, XXXX XXXX

Company response to consumer: Closed with explanation