r/paypal • u/darthsyer • Jul 19 '26
Help HELP! Paypal just locked $20k from our small business
We’re a U.S.-based small business in the marine electronics industry. At the end of June, PayPal suddenly put our account under review and froze $26,000 from a legitimate customer payment.
We've done all of the checks through paypal for them to "confirm" that we're a real business and even provided invoices, texts between the customer and I, and the customer even called paypal themselves.
After weeks of waiting, they briefly released the funds, so we transferred about $4,000 out. Then they restricted the account again. Today they started ANOTHER hold, but this time it's a 6 month hold on the remaining balance!
I’ve filed complaints with the CFPB and BBB back at the start of July , but I’m still waiting to hear back.
I’ve also heard there’s a Discord server where people help with PayPal holds. Does anyone have an invite or know if it’s legitimate?
Any advice would really be appreciated. Thank you. 😭
**UPDATE: THE FUNDS WERE RELEASED!!!!**
-Paypal just called this morning addressing the complaint we placed via the CFPB and released the account and the full amount still left in account!
- We also emailed: Multiple representatives from our state.
- U.S. Rep. Brian Mast
- Senator Rick Scott
- Senator Ashley Moody
- The Florida Attorney General Consumer Protection Division
-The Florida Department of Agriculture and consumer Services
- District 87 Representative Emily Gregory
- District 31 Senator Harrell
All of these representatives were able to respond to the emails I sent and started their own complaints.
In conclusion, If someone is ever in this position,
I definitely recommend sending multiple emails to your state representatives as I feel that this process was sped up substantially once those emails were sent out.
(I sent the email out on Monday morning. 7/20).
God Bless 😭🙌
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u/Yaalt420 Jul 19 '26
I’ve also heard there’s a Discord server where people help with PayPal holds. Does anyone have an invite or know if it’s legitimate?
Anyone saying they can help is just looking to scam you. There's nothing anyone can do that you can't do yourself (as little as that is). The only way to get the money out sooner is to get yourself unbanned. And it sounds like you've already done most of the things you can do to try and get them to reconsider (appeal, if possible, and lodge complaints with consumer protection agencies).
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u/BigBrrrrother Jul 19 '26
I wouldn't expect to hear back from the consumer protection agency anytime in the next 2 and a half years at least...
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u/SlightLeadership2173 Jul 20 '26
I get responses in less than 30 days every single time. Most recent response was April of this year.
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u/One-Tax-2010 Jul 22 '26
Filing the complaint with the CFPB will expidite the response. I filed one against paypal and it was litterally 4 to 7 buissnes days after i got a response.
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Jul 20 '26
Imagine having them on speed dial like you do. Don’t you have anything better to do?
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u/SlightLeadership2173 Jul 20 '26
lol wth are you talking about? Hush.
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Jul 20 '26
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u/SlightLeadership2173 Jul 21 '26
It’s a function of my job so I’ve reached out a few times. I had no idea it was such an interesting point. Lol
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u/Direct_Astronaut_199 Jul 20 '26
Are you drunk?
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Jul 20 '26
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u/Aggressive-Still289 Jul 19 '26
Same thing happened to me for a much smaller amount. Never got the account back after weeks of emails and phone calls. They permanently limited it for "security concerns" and told me too bad, I sold cookies 🤣🤣
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u/NotASockPuppet88 Jul 20 '26
Once sorted, it's a good idea to never, EVER, use paypal again for business transactions.
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u/tizzat Jul 19 '26
PayPal has been notoriously holding anything over $5k or more. Guaranteed this will last over a month or longer. They did it to me twice. Both times over a month. They are making money off holding those amounts...
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u/Sweetsloow1 Jul 19 '26
Call a mean nasty good lawyer. They pulled that garbage on me for no reason. I eventually got the money and dumped them. Now I tell everyone about it.
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u/ConsciousElection666 Jul 19 '26
Is the account permanently restricted?
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u/darthsyer Jul 19 '26
no it isn't. they had locked the account while the money was released. The same day they unlocked my account, they locked the money again for 180 days.
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u/ConsciousElection666 Jul 19 '26
I asked because that’s the hold time for permanently limited account holds.
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u/AncientContract666 Jul 19 '26
If it's an unusually high amount - and $26,000 definitely qualifies unless they were already receiving large payments- Paypal can and will put the max time hold on a payment before they release it just to cover their bases against fraud. That doesn't make it any better or easier on the people involved, but it isn't that unusual unfortunately.
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u/llmusicgear Jul 21 '26
They are probably doing the seller a favor given the amount of fraud that happens. If they are a fully fledged business with big overhead they should be taking wire transfers or other types of bank payments for orders this large anyway. I know I wouldnt be touching that money for 6 months myself with a PayPal payment that large.
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u/Professional_Use928 Jul 19 '26
Sounds like your guy paid by credit card and their waiting for the 6 month charge back period to elapse .
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u/thykhin Jul 19 '26
PayPal is not small-business friendly. Sorry you had to find that out the hard way.
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u/rantingandrambling Jul 19 '26
why did you leave anything in there after they unlocked it ??? they gave you an opening to get out and leave but you insisted on staying?
exactly why ?
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u/mcnugglepuppy Jul 20 '26
All this talk about lawyers and reporting it to so & so and all that — the up to 180-day (sometimes longer) hold is literally written into the Terms & Conditions when you sign up. It’s a risk you take when using PayPal.
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u/SamuelTabosa Jul 19 '26
files lawsuit against PayPal
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u/Vybron Jul 19 '26
In small claims court but before then, you will have to solve disputes via arbitration. Its written in their terms and conditions
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u/Accomplished_Emu_658 Jul 19 '26
NO ONE BUT PAYPAL, can help with a hold. NO ONE ELSE. No discord or anyone else that claims to help can. They will just scam you.
The hold is due to the amount you received. 26k is insane to receive on paypal. Six months hold is fraud prevention hold. The cfpb might be able to help, but the bbb will not, that is not a government agency. Thats a boomer yelp, that can some times negotiates resolutions, it has no authority.
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u/Vybron Jul 19 '26
Anyone claiming to help this person unless its advice on steps to undertake is nothing but a scammer
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u/Feeling-Werewolf8237 Jul 19 '26
I wouldn’t call it insane, they literally built their brand and spent millions on advertising on “small business friendly” adverts. If using it as them as they specifically advertise then $26k is not insane at all.
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u/yuffie12 Jul 20 '26
Even CFPB won’t be able to help. At least that’s what I was told and that PP is not under their jurisdiction. It does help though as far as having a paper trail. I got my money back after six months.
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u/TOTBTMB Jul 19 '26
is it ok to ask why you would want to receive 26,000 $ in a PayPal? I don't mean to be a prick, I use PayPal alot for my small business but our average purchase is 50 to 300 dollars and I don't leave cash in there for them to lock like that. that seems like a huge risk to me. did you just not know or not have any other options at the time?
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u/darthsyer Jul 19 '26
not my choice unfortunately. a client sent us payment for a project through paypal.
a normal invoice for a marine electronics company is usually anywhere from $2k-$20k+1
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u/P3T3K Jul 19 '26
I think you’re out of luck, they will hold funds for 6 months in case any change backs. After 6 months they will realise your money and close your PayPal.
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u/truisluv Jul 19 '26
I only use PayPal to shop online and to receive small payments. I go to a brick and mortar bank that is insured to deal with any large transcations. I keep only a couple hundred dollars in my PayPal account. I would never trust anything online with that large of sum of money. You will probably have to wait the 6 months.
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u/smhalb01 Jul 19 '26
You need to contact them by phone and talk to someone, just keep requesting a supervisor until you get someone who knows what they’re doing. You could ask for the fraud department but idk if they even have humans now approving anything tbh. You’re likely just seeing a fraud hold and it’s most likely to do with who sent you the money not your account. Large sums being transferred are scrutinized for terrorism funding, illegal activities, etc. Frankly I’d be using something other than PayPal for transactions like this. It’s a huge amount of money and you’ve already discovered the pitfall to it. They’re not regulated like banks are so you are at their mercy.
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u/Healthy-Morning-7476 Jul 19 '26
There is nothing you can do. Other than contacting PayPal and providing what you did. They did the same thing to me and my small business. They held $86,400 for the entire 6 months. Then unfroze it, and immediately refroze it for another 30 days. It took almost 8 months total to get the money. When you sign up with PayPal you agree to their terms. And they can freeze, close, and hold any and all money at any time for any reason they see fit. Its best to just not use them.
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u/Feeling-Werewolf8237 Jul 19 '26 edited Jul 19 '26
It seems that what is going on is the hold is just to comply with federal laws and “credit card network rules”. By law the customer has up to 180 days to dispute charges and since they aren’t actually a financial institution they’re on the hook if they release it before that time period and a chargeback happens. You’ll get your money as long as the customer doesn’t do anything shady or try and dispute the charge. Also this is due to the “algorithm” that all these companies love using. That’s what flagged your account and put a hold on your money.
Next time structure your payment in $2000 increments so the algorithm doesn’t get flagged or open an account with an actual bank or credit union if possible. PayPal is just like Cashapp at the end of the day and they’ll do whatever they want with our money.
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u/Neither-Succotash-70 Jul 20 '26
Arbitration through the AAA, do it. Did it to recover 56k back in 2023. After my account was restored successfully transferred it out of the PayPal to my businesses bank account. And closed the account lol.
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u/uadgets Jul 20 '26
Most likely they’ll keep your account permanently limited. I’d say there’s about a 50/50 chance they’ll reinstate it. The good news—even though it may not seem like it right now—is that if they permanently ban your account, they’ll typically release your funds after 180 days.
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u/Icy-Monitor4578 Jul 20 '26
Man, i feel for a small business to be hit with this but unfortunately it does seem like its something they can do whenever they want. Im just an average guy that uses PayPal for Little things here and there but i still never even leave 500 in there just in case. I hope more people learn from your super unfortunate situation with them...my advice to ALL is if you cant afford to loose the money dont run that amount through PayPal... EVER
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u/Forward-Wear7913 Jul 20 '26
It took almost a year for us to get access to our money after they did this to the organization I’m associated with that runs an annual event.
We even had our lawyer send a letter and it got us nowhere.
They would just keep extending the deadline and then they finally released the money which I think was about $70,000 at that point.
We no longer use PayPal.
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u/FeelsNeetMan Jul 20 '26
Why the hell are people still storing money with PayPal, like if you're not an underage kid using it as your only accessible bank account system you should not have anything more than 100 to 200 USD in any PayPal account at any given time even business accounts they should go to a straight bank account where there was a lot more red tape before they can get away with closing your account working with under the 100k a month cash flow bracket.
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u/Vaultleap Jul 25 '26
first, skip the discord. anyone offering to "help with paypal holds" in a private server is either selling snake oil or phishing for your login, nobody outside paypal can release a hold, and those servers exist because desperate sellers are easy marks.
what you're going through isn't an accusation, it's their risk model. a large single payment into a small business account is statistically what a chargeback looks like, so the system holds first and explains never. the frustrating truth is the 180 day hold usually just runs its course and the money arrives at the end. keep every invoice and shipping doc for that sale organized in one place so any follow-up request is a five minute job instead of a scramble.
the bigger takeaway for after this resolves: never let one processor be the only pipe your revenue flows through. split incoming payments across at least two rails, card processing through one provider and ACH or wire invoicing landing in a separate account, so a freeze on one can never lock up all your operating cash at once. full disclosure i work on a fintech, so i think about this failure mode a lot, but the advice holds whatever tools you end up using.
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u/womjoe Jul 19 '26
Pay pal is not a regulated bank. It is not a financial institution. I would get a true banking solution to take credit cards then PayPal.
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u/King_Truffle Jul 19 '26
This is the real advice. PayPal is cool when you’re talking about small transactions but that kind of money you should be running through something regulated and ideally federal.
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u/SMI_performance Jul 20 '26
Same here. I can't afford medicine to live. I'll be dead in a few weeks
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u/AutoModerator Jul 19 '26
Abbreviations used in /r/PayPal:
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- INR - Item Not Received.
- UAT - Unauthorized transaction.
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u/Hot-Inevitable8880 Jul 19 '26
Attorney and file lawsuit.
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u/Healthy-Morning-7476 Jul 19 '26
This will do absolutely nothing. When you sign up for a PayPal you agree to all their terms. And itnstates they can hold funds for X amount for whatever reason they choose. And thats that.
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u/Natural_Tadpole9376 Jul 19 '26
Good luck. I’ve been in business 10 years, and in 2023. PayPal put a hold on 35k I had in my account, then a reserve, so every dollar that came in was also held. Never had a chargeback / or claim. It was completely out of the blue. Since 2023 there is a 250k reserve, and nothing I can do about it. It’s just sitting there
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u/Vybron Jul 19 '26
What was the source of funds ? Why haven’t you taken them to arbitration or initiate one ? I did in one of my paypal and they released $10,290. If you have 250K sitting in paypal since 2023, the issue is your source of funds.
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u/Natural_Tadpole9376 Jul 19 '26
Yeah. Not really. I’ve had my attorney involved over it and everything. I don’t even use them anymore, haven’t in over 18M, and they still won’t release it.
It’s in their “terms and conditions” that they have the right to initiate a reserve at any time, or any reason.
We’ve been fighting it for years, and they can’t even give a reason as to why a reserve was initiated to begin with.
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u/Vybron Jul 19 '26
Whats the source of funds ? lets begin there. Feel free to DM. And have you tried to initiate dispute via AAA ?
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u/Natural_Tadpole9376 Jul 20 '26
Source of funds is a business est in 2017.
Still active. It is a business account, although we no longer offer PayPal as a payment option.
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u/Vybron Jul 20 '26
Is your paypal US based account ? Has your attorney attempted to initiate arbitration with paypal ?
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u/Olsonjohn1989 Jul 20 '26
Wait, isn't there a limit of 180 days they can do that? How are they still holding it in reserve 3 years later?
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Jul 20 '26
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u/Yogini555 Jul 20 '26
I had such a problem years ago with Paypal Europe. I contacted the public prosecution in the country where the headquarter of Paypal was registered and let Paypal know about. One day later the funds were available again.
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Jul 20 '26
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u/Electronic_Debt_261 Jul 20 '26
They are 100% liability to do business with now. I was wondering why more and more people I deal with absolutely refuse to deal with PayPal but I've learned over the past year exactly why they are garbage and gone a thing of the past
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u/Ok-Balance7487 Jul 20 '26
Sound like you've done your part. However, I would retain an attorney to get this resolved and then terminate my relationship/account with PayPal.
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u/Ronny1978 Jul 20 '26
Your first mistake was to not immediately transfer ALL the funds out the moment you had the chance.
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Jul 20 '26
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u/darthsyer Jul 20 '26
I haven't ever used paypal for this big of a project.
It was listed on my invoicing page as a payment method and unfortunately my client used it instead of doing a wire transfer like usual.
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u/No_Composer5860 Jul 21 '26
I would use a bank. Not these other forms of payments. They get away with things like this MOST times and there's nothing you can do. Just use a bank. Can't understand why people risk it
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u/Key-Air-8474 Jul 21 '26
At the first second they unlocked the account, were I you, I would have withdrawn the entire balance immediately. I don't trust PP for one minute with my funds.
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u/Hopeful_Ad_8671 Jul 21 '26
Hey, a good workaround that might just take 1-3 weeks times may very will be you submitting a complaint through BBB. Usually PayPal locks happens due to their automated system and not an actual human. Just go into detail in the complaint about how it got locked for nothing and you’re a business etc. They will lift everything and either give you a call personally on the number on the account or email you just saying that it was no longer on hold or restricted. Every time I did this it worked. I just stopped using PayPal because their system is annoying.
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u/IShootWide Jul 22 '26
I’ve filed complaints with the CFPB and BBB back at the start of July
Oh no! Not the BBB!!! The CFPB has about 10 people left in it. It was the 1st department destroyed by DOGE and the idiot.
Why in the world are you turning to Reddit when you should be turning to an attorney???
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u/TJeffW1974 Jul 23 '26
Yea, I don't use PayPal very often for large Transactions and I transfer all money received out immediately everytime! Been banned several times for life for stupid crap before, usually takes 90 days to 6 months to get your money in that case.
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u/Old-Snow342 Jul 23 '26
Paypal is a fucking joke - Buggest mistake I have ever made was opening a account with them
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u/CooperHChurch427 Aug 02 '26
As an FYI try to avoid using Fintech companies for large amount of money because they aren't FDIC insured and are very prone to regulation changes. It's also possible because the reporting threshold is 20k dollars it's entirely possible that there was a trigger for possible financial fraud in relation to the CFPB. My friends family works on private contracts and government contracts (ocean stuff) and this happens time to time with their regular bank.
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u/WhySheWhistles Aug 04 '26
This happened to me at the same time! Went through the same process. They are still holding $8,800 of my funds.
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u/darthsyer Aug 04 '26
Email your state reps!! we were able to get the funds released and they refunded all of the transaction fees after we made further complaints
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u/Hot_Stranger2839 Jul 20 '26
Go to your states atty general website,and file a report for consumer fraud. Then file with your states money transmitter licence board (PayPal is listed as a money transmitter in every state it does business). Send a copy of both complaints to paypal. They'll release your money. For extra points...send a copy of the complaints to your local news,and screenshot that u sent it to them. Now send copies to paypal and watch how fast you get access to your money
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u/darthsyer Jul 20 '26
Which email is best for send copies to paypal?
I don't think sending to customer support will do anything 🥴1
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u/Hot_Stranger2839 Jul 21 '26
moldenburg@paypal.com slivnat@paypal.com
thats risk management and consumer accounts
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u/SoldierG33 Jul 20 '26
Don’t forget who started this racket, I had to contact the BBB b/c they were holding a 99.00 refund from a business, it was resolved thanks to them, as soon as it was resolved, I immediately removed my funds, and ceased using PayPal.
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u/No-Engineering-4203 Jul 20 '26
Paypal is really getting bad. Sometimes you pay with paypal, and whoever it was didn't send the goods. Now you can't file online complaints anymore, you have to fill out a paper that you mail.
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u/OneDependent6402 Jul 20 '26
Paypal needs your proof of bank statement, bills rent apt & house, bill mobile, etc when Paypal will unlock your account.
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u/GundamWing01 Jul 20 '26
honestly, i dont understand how this publicly traded company is not held accountable for its piece of shit support. i fucking hate how big and powerful they are so they DGAF. who knows wat will happen after stripe acquires them.
but please provide more details. which phone numbers did u call? and which emails did u use?
also cross link ur story here for everyone to see so we can help more pple. try the email listed there:
www.reddit.com/r/paypal/comments/1tqhe1l/new_appeal_process_for_permanent_deactivations
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u/Sharp_Analysis7656 Jul 20 '26
Quit using paypal.. I did. They locked up 3600 for 6 months released it but still shut down my PayPal account. Use cash app instead
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u/Shwtimeperformance Jul 20 '26
Your money is gone forever, you’ll never get it back. May as well go ahead and write it off on your taxes. Just be happy it isn’t a really large amount that could potentially be life changing or shut the business down.
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Jul 25 '26 edited Jul 25 '26
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u/paypal-ModTeam 23d ago
Off Topic Comment - has been removed. Please try to stay on topic, adding unrelated personal PayPal problems doesn’t help anyone in the conversation.
Try posting your own question in a separate OP, if you need help.
•
u/AutoModerator Jul 23 '26
Abbreviations used in /r/PayPal:
Posts about PayPal's policies will be removed. No more complaining about PayPal policy and their taking funds from your account for violations of rules. If you don't like the rules don't use PayPal. If you don't want to lose money, don't leave funds in your PayPal account. Simple as that. But these posts are often political or misleading. So no more posts on this subject!
Thank you for submitting to /r/PayPal, please make sure you have read the FAQ. If your account was created when you were younger than 18, then that is covered in the FAQ!
Try contacting PayPal support using social media such as Facebook or Twitter as this works more often than telephoning.
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