Will Paypal Freeze me ? (LOADS of Paypal Money comming in)

by entry
24 replies
I am having many different sources of paypal funds comming into my account.

I will be getting more funds than usuall, and each one is about $200- $600. I will be getting larger amounts from 200+ different paypal customers. (So in a worse case scenario i can get $40,000) - within the space of 2 weeks.

Nb- i get some smaller amounts regularly, but i will be getting larger amounts from 200+ different paypal customers.

a) Can paypal freeze me for this vast amount of income to my paypal account comming into my ONE paypal account?

b) Have any of you had this type of paypal activity comming to your accounts? (from a series of 'low normal funds' - and then these sudden funds?)
(I have seen threads on paypal accounts being frozen due to many issues)

c) What things can i do to prevent my account from freezing?

oh and the idea is Legit and hard work has been put into it, but i cant reveal much about it at this stage. if it goes to plan then i will consider making a WSO on it.
#comming #freeze #loads #money #paypal
  • Profile picture of the author Michael Lewis
    Congratulations on all the money coming in. I have read through a lot of paypal issues here and the main thing that seems to work for most people is giving Paypal a call and telling them how much money you expect to be coming in. They will then note your account and you should be fine.
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  • Profile picture of the author Kim Davis
    yes I have heard of people getting their paypal froze because of a launch but I never did hear the solution of not having that happen... I will be looking for the answer and perhaps it has already been given... by giving them a call... sounds reasonable enough
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    • Profile picture of the author entry
      Originally Posted by Kim Davis View Post

      yes I have heard of people getting their paypal froze because of a launch but I never did hear the solution of not having that happen... I will be looking for the answer and perhaps it has already been given... by giving them a call... sounds reasonable enough

      How about another alternative payment service which Rarely has issues on lauches etc?

      Are there any payment processors regular 'launchers' use ?

      Can you list them please

      (Don't just list any payment processor you can think of, but launch friendly ones)
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  • Profile picture of the author Sheryl Polomka
    There is 2checkout which still gives your customers the option of paying with Paypal but it goes through the 2checkout paypal account instead of your own so it's not putting your paypal account at risk.

    I think if I were going to be expecting large payments coming in I would go with something like this.
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    • Profile picture of the author Sardent
      I'm interested in the replies this thread will receive.
      I've only recently started using paypal for my IM work, and LOL,my account is currently limited until I jump thru whatever proverbial hoop they pull out of their hat.

      But I do have experience from being a fairly successful ebay seller a few years ago. I stopped doing it precisely because of Paypal. My experience was that they would stoop to anything to keep you from accessing your funds, especially if they could help someone steal from you.

      I mean, just look at their TOS. It's so large it doesn't fit all on one page but is instead spread across a variety of links. To me that reeks of bad faith.

      Why am I giving them another try? For a lot of things they are the only game in town. But I am seriously reconsidering my whole approach to online marketing, what I market, who I use, etc. because of them.
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  • Profile picture of the author entry
    Originally Posted by shanedavind View Post

    If you are going to be doing these numbers on a regular basis, I suggest a merchant account would be in order.


    any recommended merchant accounts?

    Do they accept Payments VIA Paypal from customers? (have paypal integration in them)? - and i receive the money from the Merchant account direct?

    and how do they pay me? by Check ?
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  • Profile picture of the author BenSalez
    I just went through a similar issue.

    Made 30k in September and they froze me because I was a "credit risk."
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  • Profile picture of the author misterhu
    Heard of many stories about froze paypal account after large payments. Just like regular banks, they can suspect other illegal financial activities so they may need to freeze the account. The good news, as stated above, is you can contact them beforehand for large transactions. With this being said, you should be okay divulging several information about how you obtain the money.
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    • Profile picture of the author Sardent
      Originally Posted by misterhu View Post

      Heard of many stories about froze paypal account after large payments. Just like regular banks, they can suspect other illegal financial activities so they may need to freeze the account. The good news, as stated above, is you can contact them beforehand for large transactions. With this being said, you should be okay divulging several information about how you obtain the money.
      Paypal isn't a bank. Nor is it regulated like one.
      Paypal can hold your money with no explanation.
      Paypal can freeze your account with no explanation.
      Paypal can take money out of your account with no explanation.

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      • Profile picture of the author countonuspr
        First congrats on so many transactions coming in! I would launch with Paypal, but also setup like 2Checkout.com as a quick fix backup if something happens. Paypal actually fully closed my account with a similar amount of income rolling in over the same span you mentioned. They told me I was a "risk" since I had an increase in activity.

        I fought and fought and fought, but had to wait 6 months to get my funds. So my recommendation is to transfer money to your bank account every few days during the time you are getting paid and don't let a huge balance accrue in your account.

        I also found out that they can collect interest on your money during the time you are frozen. So the more you have in your account the more attractive your account is to them to freeze. Another thing I have discovered the hard way was that if you have reoccurring payments coming in and they freeze you or close you down those payments are automatically canceled for good.

        As far as a merchant I work with that understands Internet marketers that is PowerPay. They work with shopping carts like 1ShoppingCart or InfusionSoft to do transactions that go straight to your bank account. I also use 2Checkout.com. Since I have had issues with Paypal I use 2Checkout.com, Clickbank, or my merchant account depending on the situation.

        Have multiple backup options ready in case you are frozen. Basically plan on it happening and if it doesn't you are very lucky!
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  • Profile picture of the author paulie888
    Here are some steps you can take to minimize the possibility:

    1) Call them up before your expected large payments start coming in.
    2) Don't withdraw all your money at one time, and keep some money in your account.
    3) Apply for a Paypal debit card if you haven't done so already.
    4) Try to make regular purchases with the debit card.

    This should keep you safe for the most part, don't forget to inform them whenever you expect large payments coming in.

    Paul
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  • Profile picture of the author Sardent
    I was wondering if anyone is familiar with - Free Merchant Account, PayPal Alternative, Credit Card Processing - Home and if they are any good?
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  • Profile picture of the author statelizard
    This gets thrown around all the time. I have never had a problem with PayPal. That being said I also haven't had massive changes in my incoming cash. I tend to use paypal for my writing services only, and while I make a good penny or two, it tends to be a relatively steady, continuous flow, after all I can only take on so many clients at one time.

    Now what I can say is that a common theme in many, not all, of the PayPal horror stories is that people immediately withdraw all of their funds. A good rule of thumb, keep 20% of what you bring in, in the account until the 60 day refund period has passed.

    And yes I'm sure I'm going to get flamed for saying that. I'm aware that PayPal isn't a bank. I'm aware they most likely earn money on your money as you wait out the refund period. Oh well. It's the cost of doing business when you use them as your payment processor. Hold 20% back to cover refunds. Once you hit the 60 day refund limit, transfer it out. That means that every night, or every week, or whenever you can immediately take $.80 on the dollar out of your account. That seems to be the prevailing theme when it comes to keeping PayPal off your back.

    Note that I said I haven't dealt with this situation, this is only my observation from the conversations that have taken place on this forum and in other places about this very topic.
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  • Like most people are saying the easiest thing to do is call paypal and let them know ahead of time.

    But I have had massive amounts of money come into my paypal account in really short amounts of time and I have never had a problem.

    As long as everything is above board and legit you shouldn't have a problem.

    I also agree with Paul have a backup system in place.

    Cheers,
    Tristan
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    • Profile picture of the author Sardent
      Originally Posted by Tristan Bull View Post

      Like most people are saying the easiest thing to do is call paypal and let them know ahead of time.

      But I have had massive amounts of money come into my paypal account in really short amounts of time and I have never had a problem.

      As long as everything is above board and legit you shouldn't have a problem.

      I also agree with Paul have a backup system in place.

      Cheers,
      Tristan
      So those who have a problem aren't above board and legit?

      Right.
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  • Profile picture of the author Tallpplrule
    Originally Posted by entry View Post

    oh and the idea is Legit and hard work has been put into it, but i cant reveal much about it at this stage. if it goes to plan then i will consider making a WSO on it.
    I will definitely look out for that post! Way to go!

    - Ryan
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    • Profile picture of the author JayInOrlando
      Are you NUTS?

      Paypal is NOT a bank.
      Paypal can DO WHAT THEY WANT.
      Doesn't matter if you call them first.
      If they think something smells fishy (and tons of money coming all of a sudden does..) they will SHUT IT DOWN!

      Signup with a real merchant account now!

      Maybe visit your local bank and get a relationship going with them.
      You'll want them to know your face when you walk into the branch.

      Jay
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  • Profile picture of the author Debbie Songster
    Here is the reality on PayPal, payment systems and merchant accounts.

    Anytime money changes hands there is a risk to the CC processor - who ever it happens to be.

    Someone pays you $1,000 but then changes their mind and does a chargeback its the CC processor that has to collect from YOU. The risk is on them.

    The poor economy has brought out more refund requests, chargebacks and fraud reports of "product not received" as more and more people try to get out of their responsibilities.
    This makes the processors nervous.
    It doesn't matter who the processor is. PayPal, 2checkout, authorize.net, PowerPay, etc they are all wanting to decrease their risk by making sure you are able to pay.

    I opened my Paypal account a long time ago so I don't remember what i had to do to establish it but I know now they still don't ask for as much information as a pure merchant account does.
    To get a "real" merchant account usually involves an in depth credit application and credit check. I have 2 through QuickBooks. I know what I had to do for them was more than what I did for Paypal.
    Why do they they do this? They want to feel satisfied that you aren't a poor risk should you have a lot of chargebacks.

    Another thing a "real" merchant account processor will do is ask you what you are processing payments for.
    One of the factors used to determine risk is the product you are selling.
    Downloaded products, ebooks, virtual material, memberships are a lot higher risk then physical products.

    Paypal isn't the only one who will freeze funds. Places like PowerPay will place a hold on your funds as well. I have 2 clients using them and one has 5% held back and my other client has 10% held back. PowerPay has also asked to "approve" the sales pages and sales funnel and they have asked who the affiliates are as some affiliates have a history of high risk clients.

    So getting back to PayPal. They have a tendency to get nervous with a lot of transactions - especially on a new account because whats stopping you from taking all the cash and "running"? 45 days latter when your customers ask for refunds or do chargebacks on their CC, PayPal is left holding the bag. That's why they get nervous.

    To make your life easier with these payment systems, establish a relationship with them and try putting yourself in their shoes.
    Understand the type of activity that sends red flags and know that online transactions (not physical products) are the riskiest ones for payment processors. Online transactions are risky for processors as the chargeback / fraud % is higher then with Online physical products and in person transactions.
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  • Profile picture of the author snapcontent
    Originally Posted by entry View Post

    I am having many different sources of paypal funds comming into my account.

    I will be getting more funds than usuall, and each one is about $200- $600. I will be getting larger amounts from 200+ different paypal customers. (So in a worse case scenario i can get $40,000) - within the space of 2 weeks.

    Nb- i get some smaller amounts regularly, but i will be getting larger amounts from 200+ different paypal customers.

    a) Can paypal freeze me for this vast amount of income to my paypal account comming into my ONE paypal account?

    b) Have any of you had this type of paypal activity comming to your accounts? (from a series of 'low normal funds' - and then these sudden funds?)
    (I have seen threads on paypal accounts being frozen due to many issues)

    c) What things can i do to prevent my account from freezing?

    oh and the idea is Legit and hard work has been put into it, but i cant reveal much about it at this stage. if it goes to plan then i will consider making a WSO on it.
    They may freeze you if the spike is unusually large. If you contact them first and alert them to what is going to happen, there shouldn't be a problem though.
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  • Profile picture of the author MarkAUS
    Woah, thanks for this thread. I had no idea that PayPal freezes accounts. That's really important information. I'll look into that 2Checkout thing when I get to doing some type of launch.

    At the moment I can't afford a merchant account, but looks like that is the way to go if you can. Thank you to all who have also commented here. This is really good to know.

    Mark.
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    • Profile picture of the author AndrewCavanagh
      # Do the obvious things. Make sure your address is verified for example. If you don't have your address verified with paypal then you deserve to get your account frozen.

      Withdraw money as soon as you get over a certain amount. In other words don't leave $5,000+ in your account. Leave more than enough to cover refunds and take the rest out regularly.

      If you do get your account frozen you want to be sure that you've already withdrawn most of the money.


      # I remember a conversation I had with Michael Filsaime many years ago after the million dollar launch of butterfly marketing (it was one of the first million dollar product launches).

      He said he called paypal and told them that he was doing a product launch a little like xbox would do where they might get a huge amount of sales on the first few days of the launch.

      During the launch he was watching sales because he knew getting his paypal account shut down was a possibility (among other things).

      Suddenly the flow of sales stopped...he logged into his account and saw that the account had been suspended then reopened.

      The person he'd called had gone into his account and reopened it immediately.

      So yes if you're expecting or getting huge sales that call to paypal does help.


      There are other things you can do but I'll leave those explanations to someone who has a more intimate understanding of the workings of the company.

      Kindest regards,
      Andrew Cavanagh
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  • Profile picture of the author CDarklock
    In addition to Debbie's excellent post, look at the incentives.

    PayPal makes money based on the funds in your PayPal account moving around within the PayPal system. So the longer you can keep the money in their hands, the happier they are.

    So the people who get money in PayPal and then race off to move it into their bank? PayPal doesn't like them. This takes the money out of PayPal, where it no longer makes PayPal money.

    PayPal's great economic incentive is to do something that will make these people keep their money in PayPal longer. Limiting accounts and placing holds on funds will do exactly that.

    Now, if you have a HISTORY of putting money in PayPal and KEEPING it there... PayPal will be a lot less nervous if a bunch of money shows up all at once. But when your history is of sucking your money straight out of PayPal and putting it elsewhere, they get a little antsy.
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