PayPal Suspends My Account!

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I wrote earlier about the PayPal prepaid debit card and cautioned folks that PayPal is notorious for suspending or closing accounts.  I also suggested that you should NOT use the PayPal card if you can’t afford to be without the money you load on your PayPal card.

Well, PayPal suspended my account!

Fortunately, I had only ~$60 in my account.  I was able to load my PayPal account with prepaid PayPal cards from CVS (for ~2 months) and then use my PayPal card to load my American Express Bluebird at Wal-Mart.

PayPal appears to be willing to reinstate my account if I provide all the information in the screenshot below.

PayPal Debit Card Account Suspended

Waiting for my Response

PayPal is also asking for details on the $500 PayPal MyCash reloads and the system doesn’t seem to tag them as MyCash reloads, but classifies them as “Payment Received” in the screenshot below.

Can You Explain This?

Payment Received

I’m curious to see how long it will take PayPal to reinstate my account.  So, again, do NOT use PayPal if you can’t afford to be without the money which you load into the account.  Pre-paid cards have their uses, but you HAVE to be aware of the risks of using them.  Having your account suspended is one such risk.

PS:  I’m on vacation this week (and have fallen sick) so I won’t be able to get to the comments or email soon.

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57 responses to “PayPal Suspends My Account!

  1. Please get better soon, but I think companies are going to wise up to these manufactured spend schemes that make people bad customers for them. Paypal evidently doesn’t want their services to be abused (and I have no idea whether MMS is abusing them personally, but so many people are that they are understandably doing a lot of flagging).

  2. So are you going to be truthful that your transactions with them are merely to use them as an intermediary to move your cash around? Or are you going to bend the truth — or lie — in order to keep your account active?

  3. Sorry to hear you’re sick!

  4. I know a method to avoid probability of this but I cannot tell you how because if everyone do like this, paypal finally will know

    Sorry your account is closed, but the good thing is it’s easy to open a new one

  5. thank you for the update. i am very curious to hear how the whole thing works out. many of us use Paypal for various manufactured spending plans.

  6. Vanilla is not an option for me in Portland. I have a paypal debit card and a BB card and was hoping to use green dot to load paypal and then load BB, but I can’t find a place to buy green dot with a credit card. I’m thinking about bowing out of the prepaid/manufactured spend thing before I even got started.

    @ccy, opening up a new paypal account may be easy but to get a new debit card you would need to provide your ssn. I’m pretty sure paypal can put two and two together.


    GET WELL ASAP don’t worry about us, you take care of YOURSELF first,

  8. Ack! I can’t believe your paypal was shut down! Hope you get things resolved soon. And I hope you get well. I appreciate all your hard work on this blog. 🙂

  9. Paypal is a very difficult company to work with if there is any sort of issue whatsoever. I also think these reload deals and bluebird reloads may be affected some time in the future as well.

  10. I agree that you need to use caution with paypal. The same goes for Amazon Payments. Other national credit card processors have been around awhile and have learned how to manage risk. IMHO, paypal seems to be learning and is very knee jerk in their suspensions and account closures. It stems from their relationship with eBay where it is Guilty until Proven Innocent.

  11. I wouldn’t say any form of cash advance. Either this is a payment a friend owed you for a big birthday gift or it was to buy office supplies. Read the user agreement now and make sure that you don’t set off any further red flags. I know there are terms against money laundering and moving cash around like that. PayPal purchased an Israeli company in Jan 2008 that specializes in fraud detection, so you may have been caught in the net as a side effect:

  12. I don’t understand why you load your PayPal onto your BlueBird? Why not just withdraw it directly to your checking account?

  13. Darius, how much were you loading per month onto Paypal for this to happen? I don’t want to go over the limit if I can know what the limit is.

  14. I actually think there is a fairly innocent explanation here – they are asking for your Identity. Over a certain amount, all the payment processors (paypal being one) have by law started issuing 1099s last year. I know I get a bunch of them from my various payment processors for my business, even though it’s a Corporation, and so do others who are businesses or individuals (etsy sellers!).
    So, in you having “received” funds, it may be they will end up issuing you a 1099 in the end, which you will then have to reconcile/explain to big brother. Oh joy.

  15. Caution definitely! My NetSpend account was closed without any explanation at all and all they said was illegal use! No details but at least they gave me back all the moola in a check (which took forever). Had a nice HH points run on that (180k) in one month. For Paypal, instead of using my debit card, I’ve been withdrawing the money (not all at once) into my bank. Loaded several Paypal accounts then consolidated them into one before withdrawal but I also shop on eBay using Paypal. Had some HH and UR from the Paypal runs… 😀

  16. How hard were you hitting the PP Cash Cards? Max at $4k/month?

  17. DO NOT SEND IN FURTHER INFORMATION TO PAYPAL. They pulled the same stunt with me – same “reasonable” tone to get you to send details that can be used to nail you in legal action if need be. They will NOT reopen your account if you send in the information – you get a nastygram after you’ve complied and a notice they are holding your money for 180 days. Count on it.

  18. @Petra – I thought that withdrawing into your bank was a sure way to get shut down. About how much per month were you withdrawing?

  19. Screw PayPal, they closed my account a while back, locked my money, no reason given and I kept calling and got nowhere

  20. in any group of individuals there will be a very small % of people that will refuse to invent & improve, and same small % that will look to improve & lead out the way. huge majority of people will be followers in between.

    i have no idea what Pele is doing here.

  21. I hate Paypal, I HATE them with a passion, they are morally bankrupt, they are a huge fraud, I choose not to use them and I won’t do business with anyone who does. They are answerable to no one, they do what they like with my money. Just remember good people, it’s your money they play with. Did I say I HATE them. There are far better, safer, less fraudulent options out there.

  22. What is the addy to serve paypal to sue them? how many states do they have “offices”? Also, anybody know the addy for skype? thanks

  23. Did you add in other spend besides Walmart?

  24. I gave up on PayPal after they closed my account late last year. I never had a PayPal debit card – just my PayPal account tied to my bank account and a couple credit cards.

    I had been using my account for several years (usually for buying stuff off eBay and other websites; nothing that would even come close to violating their TOS) when I got an email out of the blue saying that my PayPal account had been limited. I contacted PayPal and the CSR was very nice and sweet. She asked me about some email address that I had never heard of (she would not tell me why she was asking about it) and then said she did not see any reason my account should be limited, she would forward my account to the review department, and I would receive a call back within the next 24 hours.

    When I called back after not hearing anything for 36 hours, I was told that my account was still permanently limited, there was no record of my initial call or discussion with that first CSR, there was no appeal process for the limitation (and that I was making up the previous call/CSR), and that I was no longer welcome to use their service ever again because I was deemed to be high risk.

    The best part was when the CSR said that he could not tell me why this was happening because it was “proprietary information,” but that it was nothing I had done (these were his words almost verbatim – I’m paraphrasing very slightly)!

    The only reason I can think of as to why this happened was because I opened two disputes with my credit company at the suggestion of PayPal! I had purchased a VPS (virtual private server) from a company and then purchased another one from them after having a good experience the first few days. After a couple weeks, however, the company just completely disappeared. The issue was that I had paid for a year in advance for each server. So, I called PayPal and was told that because it was not a physical good, I should open a dispute with my credit card company for the two payments and then PayPal would sort it out for me. My account was limited about a week after I initiated that process.

    I’m still annoyed about the eBay bucks (~$20) I lost because they expired (you need a working PayPal account in order to use eBay bucks).

  25. Paypal customer service is worse than Verizon if that’s possible; they sided with a merchant with out even getting documentation from them; I’d rather walk over hot coals then use them anymore; hope you feel better

  26. I haven’t gone to the limits of $4k, however I have done $1k. I’ve been a customer of PayPal for almost 10 years and have a Paypal extra rewards MasterCard. I wonder if I would be treated the same or they would be more lenient because of history.

  27. Heh ! What incredible {negative} advertising PayPal has gotten here, absolutely for free. 😀 They are in the process is disproving the old adage “there is no such thing as negative publicity”. How will any of us want to use them now? 🙁

  28. Isn’t this good news for anyone who doesn’t churn 1oK per month and doesn’t jump in front of people on airport lines?

  29. Paypal has the worst customer service department in the history of customer service departments. I have multiple horrible experiences dealing with them about the payments system for my website. Their agents are all from India and ask you to do the same silly things you have tried over and over. Right after you go through the whole process, they ferry you to another agent who asks you to repeat all of the dumb steps you just needlessly finished.

  30. Paypal has reduced the limit on loading on my account to $1000/month, my first load was last month for $2000. I am stopping on paypal completely.

  31. Just closed my Paypayl account;
    my comments read;

  32. Get well soon!!!

  33. In my 30 plus year lifetime, the worst company I have ever dealt with is the Paypal/ebay combo, with the former probably to blame more than the latter. Recently, they deducted over $200 from my account for an item someone paid for 2.5 months ago with an apparently fake or stolen credit card. This is the fourth time something like that has happened to me this year, and I have stopped selling on ebay as a result. Paypal will not protect the seller if you sell gift card codes. If you sell physical items, Paypal will take a month to figure out who is wrong, and they still might not rule in your favor even if you have a tracking number and more. If there was a way to steal from Paypal, I would do it with zero moral qualms! Paypal CSR told me that they can take a payment away from a seller’s account up to one year after it has come in if it turns out to be fraudulent! Amazing that such a company is allowed to operate in the US.

  34. It seems like Paypal doesn’t take into account the big picture: Most Paypal users whose accounts are closed are not going to do business with Ebay.
    A carefully worded letter to the CEO of Ebay might initiate some further thought about what is going on. Email is really too easy and will be ignored. Write a letter. It’s old-fashioned and works for me many times, for example, when i was declined for health insurance it got the case reviewed and a policy issued

  35. Wait a minute Darius….I thought all those people who were trying to warn you about Paypal, Netspend and others getting their accounts closed were just fear mongering? That they spread misinformation to prolong the deal, to try to keep people away. Personally I am glad they finally shut you down. 4k a month. Hogs get slaughtered.

  36. Paypal limited my account access after I added a “real” credit card. I never use Paypal for the $ “wash”.

    How to contact Paypal? I have been waiting for 2 hours — Twice in 2 days. E-mails have no responses too 🙁

  37. I know I’m late to this post, but better late than never! Doesn’t BB charge $2 per debit card load and then limit it to $100/day?

  38. @ FlyerGuy, you can load BB $1K/day (up to $5K a month) with a debit card in-store with zero fee. They only charge for online loads.

  39. So did they remove limitations from your account?

  40. don’t bother sending, it is just their way to finalize closing your account for good.

  41. Darius,

    I don’t see the issue here. You or we are legally buying the Paypal Reload Cards or any of these reload cards. People can’t seem to get over the fact that this is not some type of “crime” like some posters are implying. “Are you going to come forward”? What is there to come forward about? Someone tell me what qualifies as an acceptable transaction from a reload card? Is loading BB a violation of the terms of service somewhere?

    Could you reload your Paypal Account, and transfer some funds to a customer or friend to pay for a purchase, dinner, etc., or does this create suspicion as well?

    Thanks for all your help.


  42. So did you ever send in the info? I got the same message as you — near the end of March I was shut down — I still haven’t provided them my info — my account is still active, but it is limited and is not doing me much good. What has been your resolution?

  43. @Tom – SHORT VERSION – If you put money into an account (Chase, Bluebird, PayPal, Bank of America, etc), withdrawing >70% cash out (arbitrary #) through bank transfer or ATMs will raise flags after awhile! However, using >70% (once again arbitrary #) of that money in that account to pay bills, send money, and using it’s debit card to buy whatever you want is A-OK!

    LONG VERSION – Always remember why PayPal and Bluebird were created in the first place. PayPal reload cash-cards were created for the exact reason their name implies, to put cash into your PayPal account. So, why does someone need to put cash into their PayPal account? To buy things on eBay, to send money to someone (other then yourself), to make any purchases where you couldn’t use cash, using the debit card to make purchases anywhere because it’s convenient (fancy dining, etc). Same goes with BB; you put cash in to pay bills, or use that debit card where you can’t use cash. Pulling out little amounts of cash here and there is fine. But withdrawing large amounts and especially immediately will raise flags.

    When you put cash (or cash reload cards) into your PayPal account, and you immediately pull it out via ATM, bank transfer, or withdrawing to BlueBird (which is a bank account), PayPal is now thinking: “What the heck, why is this person putting cash in, then immediately withdrawing?!”. This looks weird, and “weird” in financial institutions equals suspicion, and suspicion MAY mean fraud, and fraud means you are a risk and then shutdown!

    PayPal doesn’t care about people racking up miles, but when they see “weird” activity, you are flagged. Even your own bank account will look at you funny if you put in large amount of cash in, then withdrawing close to same amount in the same week. Think about it, why in the right mind does anyone need to put in $4000 of cash, then withdraw $3500? If they only needed $500 in their account, why didn’t they just deposit $500? See what i mean? Do this once or twice it will be okay, do it a little too much and its an auto flag for any bank.

    A lot of people then ask me: “Then how come Bluebird hasn’t shut people down yet?
    Think about it, people buy TONS of Vanilla Reloads ($10,000/mo for two accounts!) but why aren’t they shut down? Because they aren’t withdrawing loads of cash out! They (including myself) literally are using Bluebird the way it was intended! I.e. You put cash in ($5000/month), and use $4500 of that to pay bills, send people money (even write checks!), and maybe take some cash out (bank withdraw or ATM) $500 out of the $5000. That is legit. If people we’re withdrawing 85% of the cash they put in BB, they would definitely be flagged after numerous amounts of time. But no one does that with BB because there is no need to due to the awesome, unique nature of BlueBird.

    My father has sent me LARGE amounts of PayPal money (maxed out a lot of the times) ALL the time throughout the years so I could pay my college tuition. I immediately (within minutes) transfer it to my bank account (even recently Bluebird) with no problems and been doing this for 6-7 years. This is NORMAL activity because obviously I am getting money from someone else and need cash. I could even load the max amount of PayPal money to BB if i wanted to because I didn’t put the money in myself.

  44. Paypal are notoriously corrupt! I as of recently decided to stop using them on the basis of being an Ebay seller and getting screwed but Ebay and their evil spawn Paypal. Why in the WORLD would you give Paypal your social security number!
    Dont do it. You folks can live without having your life pried into by corporate America and your money frozen when Paypal unjustly gives a crocked buyer their money back without your consent! The two should have class action lawsuits filed for the corrupt and manipulative ways the conduct business!

  45. I have been the member of PayPal for about 3 years and so far everything had been well until last month when I sent some money to my brother living in other country. In the advertisement it seems so easy to send money EVERYWHERE, but in reality it’s SO TERRIBLE. PayPal did take the money from my bank account but my brother has problems to get it. They suspend the money for 180 days! Both of us have tried few times to contact PayPal. The one here, in the USA said that there’s no problem with my account but with my brother’s. And they said they could do anything about it. One time, when I called for the first time, the CS said that it was a suspicious activity! Oh, I did wanna kill them!
    On my brother’s side, he was asked to give some copies of his identity cards. He gave what they asked, but still they hold the money and closed his account! This means that he can’t refund the money. However, when I called US Paypal for the second time, telling about that, the CS said that his account was not closed yet.
    Oh, we are so frustrated! What should we do? Should we wait for 180 days for the money? What a bummer!

  46. PAYPAL is a CORRUPTER !!!
    I got a terrible experience with paypal. A couple weeks ago, my account in paypal got limited. Paypal asked me to do some steps to remove my limited account. I have followed what paypal wanted, liked sending copy of my ID card, driving license and my passport. Even after I have phoned Internationally to paypal Singapore twice, their solution was very bad and nonsense. One of paypal cs, named ms Mon asked me to send a copy of my passport. I have sent some my documents to paypal to prove that I am the true owner of my account but it was useless. My account was limited permanently and my money was held for 180 days without senseable reason. I do regret to open paypal account. Paypal is a truly not professional firm.

  47. Can you please update whether it is resolved?

  48. Seriously, could you please post the resolution to this issue? I have $1,500 in MyCash Cards that I can’t use now because my monthly reload limit won’t reset.

  49. I’m a little late posting here, but I have had enough experience with PayPal to know that PayPal is not your friend. I had a PayPal account that got “limited” for no discernible reason. “Limited” meant I could put money in the account, but couldn’t take it out or close the account.

    I too was given a list of items to “Resolve,” responses to which seemed to make no difference and, in any case, were redundant in multiple ways. Email was simply laughably ineffective.

    I spent literally hours on hold with PayPal, and finally managed, after re-sending the same information, to get the account unlimited. Only to have it happen again. Fortunately, I had kept only a few bucks in the account after my first experience – which was a nuisance to keep tract of.

    This was not a big deal account; I deposited less than a thousand dollars a month, had no foreign transactions, and 100% legitimate activity. There were no disputes; just money deposited in small amounts, and withdrawn in smaller amounts – after all the fees.,

    Their treatment of me as a customer was absolutely terrible. The customer service was abominable. In my experience PayPal is a frustrating and risky place to do business.

  50. It may be happening again. Reports on FT.

  51. paypal limit my accountbecause I put to many complant agaistseller .I had to many and paypal limit my account attention people to boy cot paypal buy closing your account,..paypal will not close my limit account .it has a flag on it.and they wont let me get a new one.i told them off .they are trash.and they don’t believe in forgivness .we need to shut them down.they told me they send me a notice and did not get it..i found out one june25 2015 I won aitem on ebay and cant payfor it I had to cacel it with seller one ebay.i it hard to find seller take debit or credit .they all want pal pal .please cancel your account

  52. PayPal shut me down months back due to suspicious activity. I haven’t used for 3 months before I got the limitation until I accepted one payment. They never tell you the exact reason and they end up giving you the runaround for hours on end.

    I needed PayPal desperately since my customers insist on paying with them. I had to resort to buying an account from Auction Essistance even though PayPal forbids on having multiple accounts.