/ Money

PayPal isn’t always your friend

A pound symbol made of ice

It calls itself ‘fast, safe and simple’, but according to some users, PayPal isn’t living up to these qualities – especially when it comes to getting hold of your cash.

If you’ve flogged old clothes, books or electrical goods on eBay, chances are you’ll have used PayPal.

PayPal is convenient – you simply set up an account using your email address, link it to your chosen bank account and withdraw your money when necessary. But there have been cases of PayPal freezing your account and withholding your funds.

Frustrating security processes

Frozen accounts seem to be one of the most common PayPal complaints among consumers. Say you sell an expensive item, like a designer handbag, on eBay. You see the money ping into your PayPal account, go to withdraw it and… your account’s been frozen.

PayPal has probably viewed this as a ‘possible high-risk transaction’, so has frozen your account while it investigates. It can withhold your funds for 180 days and, what’s worse, your friends and family may also have their accounts frozen, because they are associated with yours. It’s a PayPal lockdown.

Even if you correctly verify your details (one of the security measures PayPal may take) and provide evidence of postage, PayPal may still hang onto your money. And when you ring up to speak to someone about it, you’re faced with a robot who offers no help in resolving your dispute.

Many PayPal users are driven to taking legal action. But should anyone have to resort to such drastic measures, just to get what’s rightfully theirs?

Blacklisted despite positive feedback

Unusual spikes in payments aren’t the only reason for a frozen PayPal account. The company also cites not paying your seller fees, your payment information being out of date and negative buyer feedback.

But even sellers with positive feedback can see their accounts frozen. According to an article in the Independent, one seller had a 99.7% positive feedback rating, but their account was frozen for falling below seller standards.

In another example, this time referenced by the Telegraph, a couple who ran an online retailer through PayPal, found that 2% of their transactions had received negative feedback. They say their account was frozen and they are now claiming Jobseeker’s Allowance.

It’s worth remembering that PayPal does allow consumers to sell items without the usual bureaucracy that comes with other institutions. But if it’s sending people into financial hardship, perhaps a rethink of its strict security measures might be in order.

Has your PayPal account ever been frozen? Did you get your money back?

Comments
Andrew Millard says:
19 April 2017

After thousands of legitimate transactions and 100% eBay feedback rating.
I had my initial account frozen, then two consecutive accounts frozen too.
If I didn’t send the goods Royal Mail Special Delivery, I got issued with a ‘goods not received’ email and then charge back.
I lost hundreds of pounds and my goods each time.
Each complaint was ignored, as they either lost my paperwork or emails.

Paypal are licensed to steal.

This comment was removed at the request of the user

Horrible, PayPal limited my account without any justified reasoning. Nearly costed me my business when they started holding my money for over 6 months.

[Sorry, your comment has been edited to align with our Community Guidelines. Thanks, mods]

This comment was removed at the request of the user

bobby black says:
1 December 2018

Getting upset is naturally and totally justified when one doesn’t get the service that was used for normal business conduct. Paypal systems suppose people are all criminals by default. Nuance is sometimes necessary.

David P Williams says:
14 October 2020

I have read through these depressing statements and received a degree of comfort as a consequence, being yet another victim. I sold some items a few years ago and a sum of about £450 was sitting in the paypal account that I had set up for these sales. I decided recently that I would transfer the money to my bank account and whilst in the actual process of doing so had an account limitation slapped down. The reason given was ‘suspicious activity on a card associated with the account’. Utter nonsense. Strange that this should happen just as I was about to make the transfer.
These people seem to be answerable to no-one. I have tried to have the account restored by supplying them (against my better judgement) with the requested driver’s licence scan and they replied saying that it is not the plastic version -but it is! They are either complete idiots or are playing a very fraudulent game sequestering money that does not belong to them. I think that the best way forward now will be to contact my MP.