Limited PayPal Account: Oh Noes!
From PayPal’s User Agreement, you can be limited for any of the following reasons:
- Reports of unauthorized or unusual credit card use associated with the account including, but not limited to, notice by the card issuing bank;
- Reports of unauthorized or unusual bank account use associated with the account;
- Complaints received regarding non-shipment of merchandise, non-delivery of services, merchandise not as described, or problems with merchandise shipped;
- Initiation by a buyer of a reversal process through the buyer’s issuing bank without first pursuing the Buyer Complaint process described below;
- Receipt of potentially fraudulent funds;
- Excessive disputes or reversals, or attempts to “double dip” by receiving funds in a dispute both from PayPal and through a reversal or a refund from the seller;
- Refusal to cooperate in an investigation or provide confirmation of identity when requested;
- Initiation of transactions considered to be cash advances or assisting in cash advances;
- Sending unsolicited email or posting referral links on websites where they are not permitted;
- Opening multiple Personal accounts;
- The account has been used in or to facilitate fraudulent activity;
- Violations of this User Agreement;
- Name on the bank account associated with the PayPal account does not match the name on the PayPal account; just to note this is only a concern with adding funds to PayPal NOT withdrawing
- Return of an incoming Electronic Funds Transfer for insufficient funds in the bank account, incorrect bank routing number, or incorrect bank account number;
- Use of an anonymizing proxy;
- Participating in prohibited transactions and activities, including but not limited to multi-level marketing programs, gifting clubs and other pyramid schemes, and listing items for sale that have a delayed delivery date of 20 days or more after the transaction list, and other activities that are prohibited in Part II of this Agreement;
- Reports from credit agencies of a high level of risk;
- Receipt by PayPal of excessive complaints regarding your account, business or service; and/or
- Logging in from a country not included on PayPal’s permitted countries list.
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PayPal tends to limit accounts based on risk. If your sales suddenly increase one day, it’s a red flag, if you withdraw more than usually in a day, it’s a red flag. The categories you list on eBay, it’s all programmed into PayPal’s system to weigh your risk. And it makes sense, statistically high risk items cost PayPal more money in fraud than lower risk items. Really just having a linked eBay and PayPal account makes it two to three times more likely that your PayPal account will be limited within the first 30 days of selling.
So what now? When your PayPal account is limited, you are usually required to provide invoices, proof of delivery, proof of address, a photo ID and or supplier contact information among other things. Most people instantly freak out and either sends their entire life’s info or just say screw it and forever lose that Paypal account. What most people don’t know is that Paypal has no way in hell of differentiating between a real utility bill, merchant account statement or driver license and one that’s made up.
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If you think about it; Paypal has hundreds of millions of users. Out of those hundred million, let’s take a very small number and say that 0.1% of those accounts are under review for a suspension – that makes at least 10,000 accounts being reviewed every week or so. Now you consider that the people working at PayPal are generally not that smart (you can tell when trying to solve a problem with them on the phone), which would mean that some high school dropout is sifting through ten thousand utility bills, driver licenses, supplier documents and merchant account statements. Do you really think they have the time to actually verify the information on the documents you send them?
If you think about it; Paypal has hundreds of millions of users. Out of those hundred million, let’s take a very small number and say that 0.1% of those accounts are under review for a suspension – that makes at least 10,000 accounts being reviewed every week or so. Now you consider that the people working at PayPal are generally not that smart (you can tell when trying to solve a problem with them on the phone), which would mean that some high school dropout is sifting through ten thousand utility bills, driver licenses, supplier documents and merchant account statements. Do you really think they have the time to actually verify the information on the documents you send them?
EBay and Paypal actually tell you to BLACK out all the sensitive information on your utility bills/driver licenses/credit card bills. This instantly makes the whole process absolutely useless because anyone can just pull a utility bill or merchant account statement out of their you know where, put any name and address they want and send it in. The person reviewing this will have maybe a 2 second glance to match up the info you have in your eBay/Paypal account and the info on this “utility bill” and just either let it go through or if it doesn’t match or isn’t very good quality tell you to send a new one. I “heard” of people who did this with tens of accounts, yes you read that right, not one, but more than 10 accounts. Totally absolutely fake… scary thing is that EVERY SINGLE ONE of those accounts got reinstated. Tells you how much they really check.
