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?
The top concern in this thread: PayPal limiting accounts and holding funds for 180 days after large transactions without warning
Pro tip from the comments: For high-ticket items ($1K+), split payments into smaller amounts or use Stripe/Square from the start. PayPal's algorithm flags sudden large transactions even on established accounts.
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.
For anyone comparing PayPal to other processors after dealing with holds - I found the PayPal fee calculator and Stripe reserve calculator really helpful. The fees are pretty similar but the hold/reserve policies are night and day different. Stripe is way more transparent about their reserve requirements.
Lurker here finally making an account. @PayPalPain your story is almost identical to mine. I make custom cabinetry and had $12K frozen after a kitchen install. The CFPB route worked for me too - took about 10 days but they released 80% of it.
One thing that helped: I had my customer email PayPal directly confirming satisfaction with the work. Not sure if it made a difference but cant hurt.
Unpopular opinion: PayPal is actually protecting themselves and arguably you too. Chargebacks on high-ticket items are insanely common. If your customer disputes in 60 days and you already withdrew, PayPal eats the loss.
Not saying it doesn't suck but there's logic behind it. The solution is just not using PayPal for big stuff, not trying to fight their risk management.
I get the logic but 180 days is absurd. Most chargeback windows are 60-120 days. The extra time is just PayPal earning interest on YOUR money. Its not protection, its profit.
@RetailWarrior22 is actually onto something. Under the Electronic Fund Transfer Act (15 U.S.C. 1693), PayPal may have liability for holding funds beyond what's reasonably necessary for fraud prevention. The 180-day blanket policy has been challenged in several class actions.
That said, litigation is expensive and slow. CFPB remains your best practical option for amounts under $25K.
Just found this thread googling my own problem. Sold a $6,500 custom engagement ring, delivered with signature confirmation, customer ecstatic... account limited 3 days later. Six years of perfect history means nothing apparently.
Filing CFPB today. Will report back.
Question for the group - does anyone know if linking a business checking account vs personal makes any difference? Im about to start selling vintage watches and want to avoid this nightmare.
Business account helps a little because you can submit your EIN and business docs upfront. But honestly for watches? Don't even bother with PayPal. Chrono24 has their own escrow, or use Escrow.com directly. PayPal WILL flag you eventually with high-value items.
Reading this thread has me terrified. I just started an Etsy shop for handmade quilts and my first big order was $2,200. Should I be worried? Payment went through yesterday and nothing weird yet...
$2,200 on a new account might trigger a review but probably not a full limitation. Just make sure you ship with tracking, upload the tracking number to PayPal, and keep all your receipts for materials. Document everything. If they do hold funds, being able to prove you're legit makes the appeals process much faster.
UPDATECFPB complaint worked! Got a call from PayPal's executive office on day 6. They asked for my business license, a copy of the invoice, and proof of delivery. I sent everything over and they released $5K immediately with the remaining $1,500 in 30 days.
The rep actually apologized and said their system "errs on the side of caution." Ya think?
15 year payments industry veteran here. PayPal's risk model is notoriously aggressive because they operate under money transmitter licenses in most states, not bank charters. Different regulatory regime = more conservative holds.
If you're doing consistent high-ticket sales, you really need a proper merchant account with a payment processor. Higher fees upfront but way less drama. Happy to answer questions.
Adding my story: sold a vintage Les Paul for $9,200. Account limited. Filed CFPB. Got the runaround for 3 weeks. Finally escalated by mentioning I was consulting with an attorney about EFTA violations (thanks @LegalTim_Esq for that tip). Funds released 2 days later.
Sometimes you gotta speak their language.
This thread is a goldmine. Bookmarked.
I've been splitting my large custom orders into multiple smaller payments to avoid this. Customer pays $2K deposit, then $2K at 50% completion, then final $2K on delivery. More work for me but PayPal hasn't flagged anything in 2 years of doing it this way.
That's actually smart. You're essentially training PayPal's algorithm that you're a legitimate recurring business rather than a sudden spike. Same reason established eBay sellers rarely get hit - consistent volume builds trust in their system.
Has anyone tried their state Attorney General? I'm in Pennsylvania and our AG office has a consumer protection division that handles payment processor complaints. Might be another avenue besides CFPB.
State AG complaints can work but they're slower and less consistent than CFPB. PayPal is required by federal law to respond to CFPB within 15 days. State AG? No such requirement. That said, filing with BOTH simultaneously sometimes creates more pressure. Just be aware you're telling the same story twice.
Question - when yall file CFPB complaints what category do you select? Theres like 20 options and i want to make sure it gets routed right
Select "Money transfer, virtual currency, or money service" then "Domestic (US) money transfer" then the issue is "Money was not available when promised." That's the path that gets the most traction for PayPal holds specifically.
@FeeCalculator_User thanks! Just submitted. Fingers crossed. They're holding $4,800 from a commissioned painting. Customer already hung it on their wall lol
Interesting data point: I tracked my PayPal transactions for 3 years. Every single transaction over $3,000 triggered some kind of review. Every. Single. One. Transactions under $1,500? Never a problem. There's clearly a threshold somewhere in that range.
Started routing all big payments through Stripe 6 months ago. Zero issues so far (knock on wood).
Off topic but related - has anyone noticed PayPal is even MORE aggressive if you've ever bought or sold crypto through them? I think they flag those accounts differently. My buddy who uses PayPal for crypto got limited after a $1,200 sale, which seems low based on what everyone else is saying.
That's very possible. PayPal has separate risk models for users who've touched crypto. AML (anti-money laundering) regulations are much stricter for crypto-associated accounts. Your buddy might want to consider opening a completely separate PayPal account for business (with different email and bank account) if they want to keep using it for commerce.
FINAL UPDATEJust wanted to close the loop on my original post. Got my full $8K back as of last week. Took about 3 months total (way better than 180 days). The CFPB complaint was definitely the key.
I've since moved to Square for in-person payments and Stripe for online invoices. Absolutely zero regrets leaving PayPal behind. Thanks everyone for the advice!
@PayPalPain congrats! Good to see a success story. I wish I had known about CFPB when it happened to me. Just waited out the 180 days like a chump lol
Chiming in with a slightly different experience. I sell on Etsy (handmade ceramics) and have been hit with PayPal limitations THREE times in 2 years. Each time was after a sale over $2K.
What finally worked for me: I called PayPal and asked to be enrolled in their "established seller" program. Had to provide 2 years of tax returns and bank statements but haven't had a hold since. Might be worth asking about if you have the documentation.
Wait there's an "established seller" program? Is that what its actually called? I've never heard of this and I've been using PayPal for 8 years.
The rep called it "seller verification" or something like that - sorry I dont remember the exact name. Basically you proactively prove you're a real business with history and they whitelist your account. Not advertised anywhere that I can find but it exists.
Reading through this whole thread at 2am because PayPal just limited my account after a $5,300 collectibles sale. The timing couldn't be worse - I need that money for rent next week. Filing CFPB first thing tomorrow.
Bookmarking this page. You guys are lifesavers.
Good luck! Make sure to mention in your CFPB complaint that you're experiencing financial hardship due to the hold. They take that more seriously. Also call the exec line AND file CFPB - don't wait for one before doing the other.
Does anyone know if there's a template for the CFPB complaint? I'm not great at writing formal complaints and want to make sure I include the right info.
Check out the CFPB complaint template in the templates section. It's specifically for PayPal fund holds. Just fill in your details and dates. I used something similar and it worked great.
Pro tip that hasnt been mentioned: if your PayPal account gets limited, DONT try to open a new one. They track by SSN, IP, device fingerprint, even browser cookies. You'll get that account limited even faster and might get banned from PayPal entirely.
I learned this the hard way after my second account lasted exactly 3 days before permanent ban.
Correct. Opening a second account while one is limited is actually a violation of PayPal's User Agreement (Section 4.2) and gives them legal grounds to permanently ban you AND keep your funds. Definitely don't do this.
UPDATEFollowing up - CFPB complaint submitted on March 6th, got a call on March 19th. They released $4,000 immediately and the rest will be available April 15th. Not as fast as some others here but way better than 180 days!
Make sure you have your tracking number and delivery confirmation ready when they call. The rep asked for those immediately.
Anyone else notice PayPal got MORE aggressive with limitations lately? In our local maker community (about 40 artisans) we've had 6 people get limited in just the past 2 months. All were first-time issues. Something changed with their algorithm I think.
Q1 2025 had elevated fraud rates industry-wide. PayPal and others tightened their models in response. Should ease up by Q3 but right now yeah, everyone's being more cautious. Consider this a forced push to diversify your payment options.
Stupid question maybe but - if PayPal holds your money for 180 days, do they pay you any interest on it? That seems only fair right?
lol no. They keep the interest. It's in the User Agreement. They're basically getting a 180-day interest-free loan from every seller they limit. At scale that's millions of dollars in free money for them annually.
Just want to thank everyone in this thread. Followed the advice here after getting $7,200 frozen last month. Filed CFPB, called exec line, had all my docs ready. Got a call within 8 days and full release within 2 weeks.
This thread should be required reading for anyone selling high-ticket items online!
Different angle on this - I run a bike shop and we switched from PayPal to Square 2 years ago specifically because of hold issues. Here's what I've learned:
1. Square has holds too but they're 30 days max, not 180
2. Their customer service actually picks up the phone
3. Fees are almost identical
4. Integration with our POS was actually easier
Only downside is some customers ONLY want to pay via PayPal. We just say no now. Lost maybe 2% of sales but gained 100% of our sanity.
Can I ask a follow up question? If PayPal limits your account, can you still USE PayPal to buy things? Or is the account completely frozen?
Depends on the type of limitation. A "permanent limitation" usually means you can't do anything - no buying or selling. A "temporary hold" on funds usually still lets you use the account for other things, you just can't withdraw the held amount. Check your dashboard, it should tell you exactly what's restricted.
Man I wish I found this thread 6 months ago. Just waited out the full 180 days like an idiot. $11,000 from selling my motorcycle. Could have really used that money.
At least now I know for next time. If there is a next time - probably never using PayPal again after this.
Throwing in another resource that helped me - there's a good breakdown of payment processor comparison that lists hold policies for all the major ones. Stripe and Square both have much shorter potential holds and more transparent policies.
I ended up going with Stripe for online and Square for in-person. Best decision I ever made for my pottery business.
Coming from the contractor side - I do home renovation and had a client insist on paying a $15K deposit through PayPal (their credit card rewards or something). I KNEW it was risky but money is money right?
Account limited within 24 hours. Three weeks of CFPB + exec calls + providing every document known to man. Finally got the funds but never again. Bank wire or check only for deposits now, I don't care about their credit card points.
Quick legal update for everyone: There's a new class action filed in California (Martinez v. PayPal Holdings Inc.) specifically about extended fund holds. It's still in early stages but worth following if you've been affected. You might be able to join the class depending on timing and circumstances.
I'm not involved in that case but happy to point people in the right direction if interested.
Timeline for people tracking their CFPB complaints:
Day 0: $8,500 frozen
Day 1: CFPB complaint filed
Day 2: Called exec line, left voicemail
Day 7: Got callback from PayPal
Day 8: Submitted docs (business license, invocie, delivery proof)
Day 12: $6,000 released
Day 30: Remaining $2,500 released
Total: 30 days instead of 180. The system works if you push back.
Quick win to share - my $3,200 got released in just 5 DAYS after CFPB. I think what helped was including photos of my art studio, business cards, and social media links in my initial complaint. Showed I was a real artist not a scammer. Anyway, shortest wait time I've seen mentioned in this thread!
Bit of a different situation but figured id share - I buy and resell rare skateboards. PayPal limited me after I had 5 sales in one week totaling $4,100. Not one big sale, just a burst of activity. Their algorithm flagged the volume change not the dollar amount.
Point being: even if you keep individual transactions small, sudden volume increases can trigger limits too. Keep that in mind if youre seasonally busy.
Contrary opinion that might not be popular here: I've been through 2 PayPal limitations and both times I just waited. First was $2,800 and second was $5,200.
Here's my reasoning: the time spent on CFPB complaints, calls, gathering documents, following up... it's hours and hours of unpaid work. For me, it was less stressful to just write off the money for 6 months and focus on generating new income through other channels.
Not saying the CFPB route is wrong - obviously it works. Just offering a different perspective for people who find bureaucratic fights anxiety-inducing.
Honestly valid point. The CFPB process took me probably 6-8 hours total between the complaint, calls, and document prep. For my $12K it was absolutely worth it. But for $2-3K? Might not be worth the headache depending on your situation.
This thread literally saved me $6,800. Found it googling at midnight after PayPal limited me. Filed CFPB the next morning. Got the call on day 9. Full release by day 18.
I'm now telling every seller I know about this thread. Thank you all!!
Anyone use Venmo for business? I know it's owned by PayPal but wondering if they have the same aggressive hold policies or if it's separate systems.
Venmo Business is actually on the same risk platform as PayPal. Same parent company, same basic fraud detection. If anything Venmo might be MORE aggressive since it wasn't designed for business transactions originally. I'd recommend Zelle for peer-to-peer business payments instead - it's bank-backed and doesn't have the same hold issues.
One year anniversary of this thread! How many people has this helped at this point? Should be stickied somewhere. The advice about CFPB specifically has to have saved people collectively hundreds of thousands of dollars in interest-free loans to PayPal.
Wow, one year since I posted this. Wild to see how many people have been through the same thing. For those keeping score at home - I'm still PayPal-free and my business has actually grown since switching to Stripe + Square.
Thanks to everyone who contributed advice. This became way more useful than I ever expected when I was rage-posting at 11pm.
Late to this thread but adding my data point. Got limited after a $4,600 saddle repair job (yes, horse saddles). Used the demand letter generator to draft a formal letter alongside my CFPB complaint. Not sure if it made a difference but funds were released in 11 days.
The letter helped me organize my thoughts for the CFPB complaint at minimum.
Important thing I havent seen mentioned: screenshot EVERYTHING when your account gets limited. The dashboard, the limitation notice, your transaction history. PayPal has been known to change what they show you later and having timestamped screenshots helps with any disputes.
Got limited right before Christmas. $8,200 from selling rare bonsai trees (yes they can cost that much). What timing right?
Filed CFPB same day, called exec line, mentioned financial hardship due to timing. Rep actually seemed sympathetic. Got a call back in 4 days - they released 75% immediately with the rest in 14 days. Best holiday gift I could have gotten honestly.
2026 update on the Martinez v. PayPal class action I mentioned earlier: it's moving forward and discovery has started. If you had funds held for more than 90 days between 2022-2025 you may be eligible for the class. Check the class action website for details (I can't post the link but google "Martinez PayPal class action" and it should come up).
So reading through all this - sounds like the play is just never use PayPal for anything over $1,500ish? Is that the consensus?
Basically yes, or if you do use it for large amounts, have Stripe/Square ready as backup and keep documentation of everything. Accept that you might have to fight for your money. It's not that PayPal is evil, their risk models are just super aggressive and they prioritize their own protection over seller convenience.
This worked for me!! Had $5,500 frozen from custom dollhouse furniture sales (dont laugh, its a real market). CFPB + exec line combo got me a call in 6 days. Full release in 12 days total.
The key was having all my docs ready before they even called: business license, 3 months of sales history, signed customer invoice, delivery confirmation with photos. Made the whole call take like 10 minutes.
Just adding my thanks to this thread. $9,100 released after following the advice here. CFPB is definitely the magic word - PayPal responds to regulatory pressure in a way they never respond to regular customer service.
For anyone new finding this thread: READ THE WHOLE THING. There's gold in these comments. And have your documentation ready BEFORE you file. Makes everything faster.
FINAL RESOLUTION: Wanted to give everyone a proper closing update. After the CFPB complaint process, I received my full $8,000 back within 3 months instead of the threatened 180 days. The CFPB complaint was absolutely the key - PayPal's "Office of the President" team contacted me within days of filing.
I've now been PayPal-free for over a year and my business is actually doing better than ever using Stripe + Square. No holds, no drama, transparent policies. Should have switched years ago.
For anyone finding this thread in the future: Document everything, file the CFPB complaint immediately, and don't accept the 180-day hold as inevitable. The system works if you push back.
Thank you to everyone who contributed advice - @TechLaw_Sarah, @LegalTim_Esq, @PaymentsPro_Henry, and all the others who shared their experiences. This community literally saved me months of waiting and thousands in opportunity cost. You all made a real difference.
Related Calculator
Calculate PayPal fees for domestic and international payments
PayPal Fee CalculatorWant to participate in this discussion?
Email owner@terms.law to request access