Why Paypal freezes accounts?

Contact Paypal and let them know you're expecting a surge in traffic and sales. This usually prevents frozen accounts 90% of the time. It's hard to say exactly what will freeze your account...but I'm sure they have algorithms in place and each person's numbers are different.

They have algorithms that automatically signal suspect behavior and events. You need to understand that Paypal is on the hook for every chargeback that happens in their system. A guy doing a 997$ scam will cause tons of chargebacks. Guess who the credit card companies are going to fault? The banks who provide the merchant account. The banks will then scew Paypal who in turn screws you.

If you can show you're a reliable seller, with tons of successfull transactions you're less likely to be put out of the system. Not removing all your money from Paypal every month also helps: it gives them security in knowing they can recover people's money in case of chargeback/refund.

Tyrus

That's a good question need to be answered. Really how they decide too much payment and what are the consequences of it?

thanks a lot for information warrior. Hows about inactive account?is it will freeze too?

nope, paypal will never freeze inactive account, if they do so, they are just losing their customer. Some people hardly do online shopping but that does not meant they will not do online shopping in the future. Do you think paypal are going to let their customer slip away because of this? NO!

Most problems I've seen have been related to someone suddenly receiving a lot of large-ish payments without having a transaction, aka 'send money' rather than something coming through IPN, eBay or other merchant gateway. For example, you have 20 people send you $997 where nothing appears to have been purchased. This is just begging to be frozen.

They are required to do this to prevent money laundering under US laws designed to fight illicit drugs, gambling, terrorism and other illegal activities. They also do this to cover their butt in cases that violate their TOS such as donations to unregistered charities, payments related to MLM and matrix schemes, stock and security transactions, etc. They may also freeze or limit your account if you have a history of chargebacks, something any credit card processor will do at some point.

I have had these issues before with Paypal. As I have sold on eBay for quite some time.

Paypal freezes accounts for a number of reasons

What they like to call your account being a higher risk. This can be because of complaints, to many payments after you just opened your account. Type of products being sold - this one is touchy as they will ask you questions about who your supplier is and if they are not happy with your response. They will ask who your suppliers supplier is.

- They are or can be very hard to deal with. I have heard horror stories of people having there accounts frozen for 180. One individual with $25,000 in his account. All because he could not tell them a good response of where they purchased 1 product.

- I to have 1 Paypal account suspended currently. I purchased an electronic from an individual online who has a contract with the factory here in the US. Lost money on the resale of said item. Paypal wanted me to find out who his supplier was. My comment to them was "can VISA walk into Best Buy and ask who their supplier is for an item and if they don't give it to VISA then they will freeze all of their funds through VISa for 180 days. I don't think so.

Sorry for the vent. This is a pet pieve of mine. Because I am not the only one online feeling this way. There will be other options available and competition is rising against Paypal and eBay alike.

Hope this helps.

It normally only happens to new accounts that start receiving a lot of payments quickly, to cover their backs paypal freeze the account to make sure everything's above board...

I had my account frozen, it was a shock especially after reading the horror stories on the paypal bashing forums about peoples accounts being frozen for months.

The way to get your account back is, first, don't panic, then do exactly what paypal ask of you in the quickest time possible, it's usually just a case of giving them supplier information, receipts e.t.c.

I found phoning them up after the completion of each step helped, they normally give a time frame of a few weeks but I got my account back in 5 days by doing this.

Cheers,
Danny.

i've heard all these stories too; i just got my own free merchant account to avoid paypal

Tx for the tip. always handy to know.

f.