Paypal froze $70k+ in my account.

schockergd

New member
Dec 11, 2008
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Circleville Ohio
Been a member with paypal for over 10 years now, done hundreds of thousands of dollars worth of transfers with them.

Recently launched a new product at a fantastic price point as a pre-order. Put it up on our website, did a big marketing campaign, sold around $65k in product (The remainder was money I kept in there because I used a Paypal debit card regularly).

They locked the funds mid last week, saying that i needed to provide invoices and the like. I did, then they requested more invoices and business information, which I sent them.

Now I got a email this morning stating that the money will be locked for 180 days. No way to appeal, nothing.

Our pre-order was quite short term, the customers will have all their products in their hands within two weeks or so, i have almost no product complaints and have delt with disputes typically within 24 hours of notification.

I'm at a loss. They just about ruined my company. We've done our best to offer what our buyers want at low prices, and doing pre-orders is usually the best for everyone because it allows us to buy in bulk from our wholesalers.

Will likely be calling a lawyer later today.
 


All the best , my friend . They freeze many accounts like this and this is what happens :

the money will be locked for 180 days. No way to appeal, nothing.

Most of the guys can't do anything since it should be funds like $500 or a few K , they can't appeal etc .

But if some big shots like you take action with lawyer i am sure most of the people will be helped , Again - All the best - Sue them !
 
If you do actually pursue this legally that would be awesome. Too many people just let them get away with shit like this because it just wouldn't be worth the cost of lawyering up.
 
If you do actually pursue this legally that would be awesome. Too many people just let them get away with shit like this because it just wouldn't be worth the cost of lawyering up.

Correct , it's just not worth to fight with them for funds like 1k , so most of the people just give it up .
 
You have to have a lawyer call on your behalf. I've always been able to call personally and get stupid decisions reversed, but since you're talking about your business don't fuck around. You can do pre-paid legal if you absolutely have to...research ahead of time to know where you want the legal beagle to call as your representation to release the funds immediately and follow up with a certified letter.

Outside of that, you learned a lesson. Don't co-mingle personal/biz funds, and never rely on one payment processing system...sucks, but important lesson to learn.
 
Dude that sucks. It really does. But I gotta ask -- why did you go with PayPal vs another processor?

We have 3 processors.

We were in the process of switching from Paypal to Auth.net via a local chase bank, but our suppliers offered us a great deal if we set up the pre-order last week rather than whenever the auth.net got set up. Because of that we made the choice to run with paypal rather than auth.net or someone else.
 
Will likely be calling a lawyer later today.
When this happened to me, I just recorded all calls with them (and informed them I was recording them) using callburner, then sent them a one page letter to head office in Ireland (US has a head office too) giving them an ultimatum of 30 days to return the funds to me before I'd start court proceedings (here at least, you generally have to do that anyways), I also mentioned the fact that all calls had been recorded. Within a week I had a letter back from the head of executive escalations confirming that my account was now unfrozen.
 
Why the fuck would you leave 70k sitting with those criminals? The money goes in today and out today. Never leave more then what you need to cover your chargebacks. And when you transfer the money to your bank account, transfer from that bank act. to another seperate bank account. Don't let these cocksuckers have the opportunity in the first place.

You can contact your attorney. But also make a massive social media campaign. They have been going out of their way the past year to clean up their image. Send a fedex package marked "personal" to the ceo, with a letter explaining your situation and how you will go out of your way to tarnish Paypal's reputation with all the members of the various buisness organizations you belong to.
 
This has happened to me in the past. I was a little bitch and didnt do shit about it. 180 days I got the money but the situation seriousy set me back.
I would take Joes advice above and go after them for it whilst getting another merchant account setup as soon as possible. You live and learn. Never base your livelyhood on Paypal.
 
I've had luck emailing the executive office and threatening to file a complaint with their State Attorney General, FTC, FDIC and BBB. They not only reversed the decision, but sent me an apology letter and a Paypal flashdrive/pen lol. I think I got the template email and the list of addresses from paypalsucks.com
 
For anyone reading that wants to avoid this happening (especially if you're keeping tens of thousands in a fake/stealth account -- don't do it), here are some things to make sure you're handling it right. Also take note of the fact that paypal doesn't limit accounts manually, they have software detecting unusual activity which results in that.

1. Don't ever use a general email - hotmail, gmail, yahoo, etc. Pick up a domain, make it look professional and use that exclusively for your account.

2. Use 1 ip. For good -- It has to be static. The ip you used to create your account is the one and only you should ALWAYS log in from. Meaning, no travel log ins, no mobile apps, no unexpected purchases. Just don't do it. Though they might not limit you at first if you just log in but don't purchase anything, they still have security as grounds for limitation because you wouldn't want someone logging in from a country somewhere far off and emptying your account, right?

3. Don't do unusual money transfers. If your transaction history is filled with $100-200 transactions, a $10k transaction would look fairly unusual in comparison. Also if it remained empty for months and all of a sudden you accumulated a shitton in a short amount of time, alarms will certainly go off. The best thing you can do is call them in advance when you're expecting large sums of money, not to raise any flags and to stay on their good side.

4. Pull your cash out asap. $5-10k is the maximum I'll ever trust them with. Actually, don't put more money in there than you would in a casino, keep it to amounts which wouldn't hurt your wallet losing. Precisely because, well, op is a perfect example of that.

edit; A nice alternative is 2checkout, you can hook it up to a payoneer debit card and let your clients buy with cc/paypal, then withdraw directly from there.
 
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Make a big enough stink, and they will cave in. The easiest route is probably the BBB. Paypal has a separate team that handles BBB requests. Normally, I'm not a big fan of the BBB, but this is one case where it works, since Paypal has an A+ rating with them, and for some reason, wants to maintain it.

I assume that hiring a lawyer and serving a demand letter that you actually intend on following through with might have the same effect.

Last approach I've seen work would be to do a blog post with screenshots of receipts, pictures of products, etc, and a story compelling enough to take off on reddit, twitter, etc. That's probably less likely to work than the other two approaches.

If you read the stories of people that were successful getting unfrozen, they did one of those three things. I haven't seen any other approach work.

Of course, the best bit of advice is to withdraw on a much more regular basis such that you never have more in the Paypal account than you can afford to be frozen :)
 
Another reminder to get my ass on Stripe.

The API is very cool, but the flat 2.9%+0.30 isn't so cool. Shop around before you use Stripe. Make sure you're comparing apples to apples. Many places will quote a "qualified rate", which isn't the same as a flat rate in any way. For comparison, Paypal Pro starts at 2.9%+0.30, like Stripe, but drops to 2.5%+0.30 at $3k/month, then 2.2%+0.30 at $10k/mo.
 
Man, sorry to hear that OP. This is exactly why I don't keep more than say $500 bucks in any Paypal account at one time. I just don't trust those assholes with any more than that.
 
The API is very cool, but the flat 2.9%+0.30 isn't so cool. Shop around before you use Stripe. Make sure you're comparing apples to apples. Many places will quote a "qualified rate", which isn't the same as a flat rate in any way. For comparison, Paypal Pro starts at 2.9%+0.30, like Stripe, but drops to 2.5%+0.30 at $3k/month, then 2.2%+0.30 at $10k/mo.

Thus why we're switching to auth.net and chase. I think our quoted rate was .30 + 1.75% or even less than that.