Banned From PayPal! (Permanently “Limited”)

Last week while busy at my ‘day job’ I got the following email on the iPhone:

(slightly edited for brevity)

Dear Randy Brown,

The PayPal User Agreement states that PayPal, at its sole discretion, reserves the right to limit an account for any violation of the User Agreement, including the Acceptable Use Policy. ….

We are hereby notifying you that, after a recent review of your accountactivity, it has been determined that you are in violation of PayPal’s Acceptable Use Policy regarding your sales of Subscription Services … Therefore, your account has been permanently limited.

You will need to remove all references to PayPal from your website(s)
and/or auction(s). This includes not only removing PayPal as a payment
option, but also the PayPal logo and/or shopping cart. We thank you in
advance for your cooperation. If you have any questions, please contact
the PayPal Acceptable Use Policy Department at aup@paypal.com.

Sincerely,
PayPal Acceptable Use Policy Department
PayPal, an eBay Company

My first gut reaction that this was just another phishing attempt, so I quickly logged into my PayPal account only to find the following:

We recently reviewed your account, and we need more information about your business to allow us to provide uninterrupted service. Until we can collect this information, your access to sensitive account features will be limited. We would like to restore your access as soon as possible. We apologize for the inconvenience.


Why is my account access limited?

Your account access has been limited for the following reason(s):

  • Mar. 27, 2008: In accordance with PayPal’s User Agreement and Acceptable Use Policy,we have closed your account. Your funds may be held for 180 days from the date of your last transaction. After 180 days, you will be able to access your funds by requesting an online bank transfer or, if applicable, a check from PayPal. Please update your address or bank information as we cannot be held responsible for checks issued to an incorrect address. We do ask that you please remove reference(s) to PayPal from your site

It took me only a minute to realized something I never even thought was possible:

I was banned from PayPal!

All the work I had done in the last year building my Premium Membership income to over $5,000/mo. was gone! That’s it, game over, no reason to go on! I literally became ill, and I assumed that my online career was over for good.

After calming down and putting away my rope and wobbly stool, I figured that this must be a mistake. I had used the term “Adult access” in describing an area of our premium membership forums and surely this must have tripped an automatic red-flag or something. I contacted PayPal customer-support by telephone and was told that I could send an appeal to “appeal@paypal.com”. I promptly wrote a lengthy explanation and fired it off to the ‘appeal@paypal.com’ address.

Now here is where I began to realize that PayPal is not the most professional outfit out there. 24 hours after I sent my appeal to appeal@paypal.com, it was returned as undeliverable – those fucks on the phone gave me a fake email address to send my appeal to! How’s that for professional customer service?! Now I went from being depressed to angry. I resent my email, this time to AUP@Paypal.com which was the address for questions that was on the first email I received.

*Update: I have since learned from a PayPal employee that the correct email for a PayPal appeal is appeals@paypal.com . I have not tested it, but I was assured that appeals@paypal.com (with an S at the end) is the correct email address.

Within hours of re-sending my appeal to AUP@paypal.com I received what appeared to be an automated response that basically echoed what the first email said: “you’re banned from PayPal and we are going to hold your balance ($5,100) for up to six months“. I then sat down and wrote yet another email, explaining that after being a long-time PayPal customer, paying thousands of dollars in fees over the years and being blown-off by the customer support people who gave me a fake email address that I at least deserved the professional courtesy of being given the assurance that my issue had been reviewed by a human being. I was confident that if someone actually reviewed the website, that there was no way they could come to the conclusion that we were selling subscription services to “certain sexually explicit material“.

Less than 12 hours after my “demand” for review I got my reply, from a human, assuring me that my case had been reviewed – and they would not be reversing their decision, and my $5,100 balance would be returned to me within 180 days.

Ok – so it’s PayPal’s game and they have decided to take their ball and go home. Time for me to move on and find someone else to give my transaction fees to.

Google Checkout can have my transaction fees from now on:

I had thought about using Google Checkout in the past because their transaction fees are much lower than PayPal (about 1/3 less) – but because GC does not support ongoing subscription payments I stuck with PayPal. Well now that PayPal has decided they no longer want my transaction fees I figured it was time to switch to Google Checkout. This would mean that I would have to change from a “subscription” based model to a one-time “lifetime” membership model. We’ve been offering lifetime memberships for $25 at the site for over a year, and we get a few each day, so the move to lifetime only memberships is not that big of a deal. And even though there are other providers that can do ongoing subscriptions, because there are no Drupal modules to support them, they aren’t a good choice for me.

The average lifespan of our premium subscriptions was 3-months. So earnings for the average subscription were $9.97 ($5.99 first month, $1.99 for each of the remaining months). We are now offering lifetime Premium Membership for $25, which is approx. 2.5x that value of an average premium subscriber. So even though I expect fewer lifetime signups because of the higher fee, that should be offset by the increased fee. To my surprise though, so far we have been getting the same number of higher-priced lifetime signups as we had been getting with the lower priced subscriptions, so earnings for the month so far are way above average. We are also offering a $10 discount to current subscribers who would otherwise loose access to our Premium Forums and so far there has been a very high purchase rate as their PayPal subscriptions run-out. So – even though PayPal has banned our account, being forced to move to one-time fees with Google Checkout may have been the best thing that has ever happened.

How to tell if PayPal is reviewing your account

A few days before PayPal banned my account, I received two emails that I had successfully confirmed my bank accounts – one email for each bank account I have setup in my PayPal profile. When I sent the email asking for PayPal to appeal my case (the one that did not get returned) I received two-more of those automated “your bank account has been confirmed emails”, and then, less than one-hour before I got my final response from PayPal, I got two more of the “your bank account has been confirmed” email messages. So it appears that each time PayPal looks at your account they also verify/validate your bank accounts, which triggers those emails.
And lastly: If you rely on PayPal make sure you read and understand PayPal’s user agreement and acceptable use policy. Even though they gouge you on fees, it can really ruin your day if they ban you. Although it has actually ended up increasing my earnings by being forced to move away from Paypal, waiting 180 days for my account balance is just no fun. I recommend not getting yourself banned in the first place.

Update: after posting my story i found this website, PayPalWarning.com
Where I learned a lot about how PayPal does business. If I had seen this website sooner I would have thought twice about letting them hold so much of my money. If you use or rely on PayPal I recommend that you check it out. Another very informative site is www.screw-Paypal.com

**Update#2: Paypal has released my balance to me!

***Update #3: Paypal has UNBanned my account!

Banned From PayPal! (Permanently "Limited") by

115 thoughts on “Banned From PayPal! (Permanently “Limited”)

  1. I made an account long ago sometime in pre-2010, I think 2005 maybe? (although for some reason it says I joined in 2013… Paypal can’t even manage that info right). I decided to use a fictitious name since I wanted to stay anonymous since well.. It’s the net, and I did not trust any services/institutions to keep my info safe, even back then. And it never gave me any problems since all my funds can quickly go to different sellers instantly, even though my credit card had a different name on it. So much for security, right?

    Anyways, when I was trying to send funds to another paypal user, who did not have their account verified as well, it took the payment to reach them a lot longer than it should have been. And it was not the first time either. Happened twice already out of the many I’ve dealt with. So at that point, I finally decided to make a legit account, but that new account did not allow me to use my credit card, only a bank account. And since I didn’t want to link my bank account (for privacy/security reasons), I decided to just simply use my old account which was not restricted like that and just have the name switched to my legal one. I provided all of the documents required.

    But then they sent me a message first saying that they needed a document regarding the switch in real life. How am I supposed to provide documentation for a fictitious name??? And also when I clicked on the link to submit more documents, it clearly stated on their page as this: “You can make a minor name change on your PayPal account if you registered using a nickname, a fictitious name, or made a typographical error.”

    But when I try to make minor changes, it only allows me to edit around 2 characters max. So I replied to the message saying that the ID and documents that I provided are my real name. So apparently that got that their knickers in a twist and limited my account. I tried calling customer service and they told me that unless it was named after my business as the “fictitious name”, any other fake alias’ are a no-go. So then I asked why they even allow fictitious names in the first place? Why not warn new customers that there is such a penalty? The rep could only stupidly reply that “they would encourage people to provide legal names (which is why it asks for legal name at sign up) and if people don’t, then they would give them flak for it. First off, people shouldn’t be giving fake names to any financial institution in the first place.” Sure I can grudgingly comply to that last part. But still they should not have given those misleading words that you could just simply have your name revised then. I mean it’s just mother-effing name. On the NET. Obviously people are going to be hesitant to give out their real names. Especially since hackers are constantly roaming around.

    And even though I provided real life documents for it, they still wouldn’t budge. And now that they know my real name, the rep said that they have banned me for life. So even if I try to sign up with a new account, they will not allow me to use their service. EVER. Essentially that’s all she wrotes.

    Well then. That’s one future business that they’ve willingly let go.
    I don’t care what anybody says or thinks that it’s my fault. If they were truly all about accuracy and security, they should’ve checked authentication right at the sign-up part. And if otherwise, then they shouldn’t have clearly written on their site that you CAN change your name, even if it was false at sign-up. But since ANYBODY can sign up with any name without it being required to be authenticated, apparently they will gladly take your money like the greedy f**ks that they are. And then once you try to make a move to verify your account like me, then they suddenly get all high and mighty saying “Oh we care about security and fraud”…. Right. Sounds like they more care about themselves losing money rather than caring whether or not if their actual customers are ones to get ripped off. And guess what? I just got ripped off by their ToS when I was trying to come clean about it.

    Well now I see why some sites/business that I frequent no longer accepts paypal options… This is such a terrible and pathetic service they are running.

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  3. Hi,

    I created PayPal like 2-3 months ago and its permanent limited now and I don’t know it’s reason. They just put my account on limitation and they told me nothing about it. They said they can’t provide any information about it to me. I’m too much depressed about it. I don’t know what to do.

    Can anyone give me right direction?

    Thank you so much in advance.

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