I sell custom furniture. Had a customer pay $8K for a dining table via PayPal. Transaction went through fine, customer is happy, table delivered. Two days later PayPal "permanently limited" my account and is holding the $8K for 180 days.
No warning, no explanation beyond "unusual activity." I've had this account for 6 years. What can I do?
welcome to the club. same thing happened to me last year. spoiler: you're not getting that money for 180 days no matter what you do
try calling the executive escalation line. google "paypal executive escalations" - there's a direct number. regular support is useless but exec team can sometimes release funds early if you have good documentation
The 180-day hold is in PayPal's User Agreement (section 10 on Restricted Activities). They can do this for basically any reason. Legally they're allowed to, practically you have limited options.
Your best bets: (1) file a CFPB complaint - sometimes gets attention, (2) contact exec escalations as mentioned, (3) get your customer to confirm delivery in writing and submit that to PayPal, (4) if in California, threaten small claims - they often settle rather than send a lawyer.
@TechLaw_Sarah I'm in Texas. Does small claims still work here?
Yes, Texas small claims goes up to $20K and PayPal's arbitration clause is questionable on enforcement. Filing fee is like $50. Honestly though, the CFPB complaint is usually more effective and free. PayPal has to respond within 15 days.
$8K furniture through PayPal was your first mistake tbh. PayPal hates big-ticket items with long production times. Use Stripe or direct ACH for anything over $1K. Expensive lesson but now you know
filed a CFPB complaint for a similar issue ($4K hold). got a call from paypal's "office of the president" within a week. they released my funds after i sent them proof of delivery and business docs. worth trying
Update: filed CFPB complaint. Got a call 4 days later. They're releasing $6K now and the rest in 30 days instead of 180. Still annoying but better than nothing. Moving everything to Stripe going forward.
Want to participate in this discussion?
Email owner@terms.law to request access