A few random stories from users about PayPal (user horror stories)

Here are few random random quotes/stories from users about there PayPal experience. US and UK PayPal users comments are here, there is even a comment from a (ex?) PayPal employee.


 “Paypal is well known for freezing accounts for any reason and for inconsistently applying their own rules.”

Paypal is well known for freezing accounts for any reason and for inconsistently applying their own rules. The process to get off their bad side is long and painful, and they will do everything they can to hold on to the money for as long as possible. They are not regulated like a bank or brokerage, so there is really no recourse for the consumers. In short, never EVER leave any money hanging around in your paypal account.


never link PayPal to your main checking/savings bank account. Create a separate savings account which its only use is to link to your PayPal. Transfer all money out of Paypal account as soon as it accessible then transfer the money out of that savings account as soon as it’s accessible.



PayPal can reach into your bank account and take money if it wants your money and your PayPal account doesn’t have enough. You agreed to it on the terms of service.



This happened to me years ago. Wife ran a business making and mailing products out to people. One customer out of like a thousand didn’t like their product, and instead of talking to us, they made a complaint with PayPal, who promptly froze our entire PayPal account and took money out of our main bank account. It took literally a month to sort out that mess. Never used them again afterwards.



I bought a custom gaming machine from a friend’s business which was about £2k. He couldn’t access the money from his paypal account (longer story behind his endeavors), so he asked paypal to reject the payment and I paid £2k through another service.

One week later, I am out with my family, and it’s time to pay for lunch. My card gets declined, twice I tried. I think nothing of it, and pay by cash. Then I go home, and on the way, I decide to get some more cash out at a machine. -£2k maxed out, I think WTF?? been ATM scammed?? Phone bank account straight away. Talk through and and realize it’s Paypal. Told them it should have been reverted. Bank refunds me, and sends a claim to Paypal, I get my money back, my friend’s account got frozen with a case against it and £2k removed.

I check Paypal later that day, and find £2k sitting in my paypal account. It’d been sitting there for a week. Nothing, no message, email or anything. I ask my friend what’s going on, he says take the money out. I take the money out straight away. Then all hell breaks loose, as my account and my friend’s account gets frozen and £2k gets taken from his account my balance (not my account thankfully). Long ordeal to get the accounts unfrozen, my balance goes crazy on my account as the paypal staff mess up sorting my balance to be right..

Finally after a lot of chaos and my friend hammering down on them, we close the case, friend gets his money back, I get my account restored. We managed to get quids up too, due to their incompetence. But my god, I hate Paypal.


Paypal held onto my money for god knows how long without me knowing. When sorting things out, accounts got frozen, money disappeared. In the end, quids up.

Edit: Just remembered, when I got the refund from my bank, my friend’s account was frozen, and the case was opened then. When I took the money from my account, that was when my account got frozen.

Edit 2: Just to clear up bad writing. The refunded money was sitting in my paypal account without me being informed, not my bank account. Which meant Paypal still had hold of my £2k of my money.



I’ve got a recent one. I’ve got multiple checking accounts. I recently switched my “primary” account over from a credit union to a bank, due to the closing of a physical location for my credit union within a 45 minute drive from me. But I kept the account open, since credit unions almost always have better loan rates and such, but it only has maybe $30 or so in it, just enough to keep it “alive.”

Anyways, I moved my PayPal linked account from the old checking to the new account. I come across an eBay seller with some great deals, so I order up a string of items from him, a bunch of small transactions of about $10-15 each, totaling maybe $100.

PayPal then proceeds to withdraw funds from both my old account and my new, despite the old account not being linked in any way anymore.

Six transactions overdraft on the old account. Each incurring a $30 overdraft fee. So now my old account is sitting almost $180 in the red, and I’m out the cash in my primary account.

I contacted PayPal, furious, and after a series of back and forth, basically they wanted me to provide the statements to prove they’d actually done this. My credit union doesn’t run statements until the end of the month, so that took about three weeks to be able to provide that. Once done, it took PayPal another month to review it and admit fault, issuing a refund to my PayPal account.

But the $180 in overdraft fees? Not their problem. I’m just fucked on that.

I was able to take the documentation of all this to my credit union, who agreed to reduce it to a single overdraft fee of $30. But goddamn, what a pain in the ass.



 PayPal knows full well that they have a record of all transactions on your PP account, including the source of the funds. They make you go through all of the legwork, research, back-and-forth, and on and on and on because they know that most people will eventually give up.



Also if for any reason they freeze your account permanently (ie no further access, not able to delete or remove personal/account information), you will not be able to create a new Paypal account OR pay as a “guest” using PP if you have the same bank account number OR debit card linked to the account.

This has happened to me – now I must create a new bank account in order to sign up for Paypal again.



I had a business account for many years in good standing, over 8,000 confirmed transactions, few disputes, no unresolved disputes, etc. It was primarily used for a self-serve ad program, create your ad, choose some parameters, submit payment, pretty much the same way reddit’s ads work today. We sold (more on this in a moment) an ad campaign at one point to a guy who was an affiliate of some online casino and wanted to promote his affiliate URL. The campaign never saw the light of day because we didn’t deal with that kind of business either, the transaction was canceled/refunded within an hour or so of being made.

This guy chose to pay through PayPal, and our system used the buyer’s ad campaign name as part of the transaction identifier (PayPal’s gateway lets you pass through all sorts of variables and we took advantage of that fact). He’d named his campaign something like “my casino ad.” Several days after the event – his purchase, the quick cancellation and refund – PayPal’s system figured out that the word “casino” had been part of a transaction ID, and summarily locked my account. There wasn’t any money to take, but they cut off any future fees they would have earned from me.

There was an appeals process, but it was a joke. They just kept repeating the part of their Terms of Service that prohibits gambling, despite the fact that a) we sold advertising, not gambling, and b) we had canceled and refunded the transaction right away. Fortunately, 2Checkout actually had sentient humans on their staff so while we lost the convenience of PayPal, we didn’t have to shut down.

If you want to get someone’s PayPal account shut down, you can probably just send them $1 unsolicited and put the word “casino” in the transaction notes.



I worked in the limitations department. As a “supervisor”. Basically the guy you talked to when you were done talking with a rep. I would continually see cases of frozen accounts for donations because of the lack of regulation on them. At one point, they did give us the green light to acknowledge that we earn interest on the held money. That lasted for about a week.



It’s so sad that PayPal was originally created to take advantage of the Internet and help people use it more freely. Now they seem take joy in stopping others from doing just that. PayPal is now just as draconian and profit-driven as the banks they want to replace.
And I hate to say it, but anyone who uses PayPal at this point for their crowdfunding is not very smart. PayPal has a long history of this sort of unfair practices.



The REASON paypal is such a problem is that they act like a bank but they are NOT in fact a bank. so the laws (as few and limited as they are) that protect us and limit banks “don’t apply” to paypal.

I once tried to be nice. I let paypal use my bank account for some transactions to save on the credit card fee’s that they have to pay.

what they did not tell me was that when you use instant transfer they secure the transfers of over $20 on your primary credit card.

On top of this my primary credit card was my BANK CARD. from the same account the instant transfers were taken from.

SO when I paid $600 (rough total) out of my bank from instant transfer they TOOK $1200. the $600 instant transfer and the $600 “security hold” from the same account for the same instant transfer.

needless to say I did not have $1200 in the account.

thankfully back then the bank was a little more customer service oriented and the rep could clearly “SEE” that they were all duplicates and summarily removed them (paypal flat out refused too)

needless to say it was the last time I used instant transfer and I changed my account number at my bank and will never give paypal access to my bank account directly again.

not until they are classified as a bank and placed under the same rules and restrictions as a bank.



My wife works for a small company that sells musical keyboards which cost thousands of dollars. There were a few times that someone paid with Paypal, signed for the delivered item, then complained to Paypal that it never arrived. Paypal gave the money back to the thief, even though the vendor had proof the item was delivered. That security guarantee that Paypal offers is a scam.



A while back i sent someone 700 dollars or so. My account was connected to my bank account. That same day Paypal closed my account because they found out i had a banned account from 6 years ago or so. Nothing illegal. I just sold something they thought was immoral. So now this new account was also closed. Obviously the 700 transfer to the other person didn’t go through.

Ok no big deal and i moved on. 2 days later i noticed they took the money from my bank account anyway and when i called them refused to give it back. I had to wait 6 months i believe. This was insane! There were no pending charges, noone was owed money and like i said they stopped the 700 transfer. They had no reason whatsoever to take and hold my money. It’s insane a company is allowed to do this.

Anyway, i obviously wasn’t gonna accept this and figured as they closed my account anyway i had nothing to lose and reversed the transaction through my bank and blocked them from taking money from me again.

But it doesn’t end here. The best part is that they fucked up and after x amount of months i get an email that my money is released and i can withdraw it! I logged in and there was 700 dollars sitting in my account! I immediatly took it out. Never heard anything about it again.

They are idiots and people should stay far away from them. You won’t be as lucky as me.

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