Square Deactivated My Account & Won't Release My Money - What Are My Options? (2022)

Im freaking out right now. Square just deactivated my account out of nowhere and theyre holding almost $8,000 of my money.

I run a food truck in Austin, been using Square for 3 years with zero issues. Last week I had a really good weekend at a festival - processed about $4,200 in two days. Then Monday morning I wake up to an email saying my account has been "deactivated due to activity that violates our Terms of Service."

No warning, no explanation of what I supposedly did wrong. Just... boom, account gone.

I called customer support and they basically read me a script about how they "reserve the right to terminate accounts" and cant give me specific reasons. When I asked about my money they said it could be held for "up to 90 days" while they review my account.

This is my livelihood. I have rent due, I have to pay my supplier, I have an employee who needs his paycheck. I cant wait 90 days for MY OWN MONEY.

Has anyone dealt with this? What are my actual options here? Can they even legally do this??

@TacoTruck_Mike - I'm sorry you're dealing with this. Unfortunately this is extremely common with Square, PayPal, Stripe, and similar payment processors. Let me explain what's happening and your options.

Why they can do this:

When you signed up for Square, you agreed to their Payment Terms of Service. Section 15 gives them broad rights to suspend or terminate accounts and hold funds if they believe there's elevated risk. The "sudden spike in volume" from your festival weekend likely triggered their automated fraud detection system.

Your legal options:

• Formal Demand Letter: Send a written demand for release of funds. This creates a paper trail and shows you're serious. There's actually a Square demand letter generator that can help you draft one properly.
• State Attorney General Complaint: File a complaint with the Texas AG's Consumer Protection Division. Payment processors hate AG complaints because they have to respond formally.
• BBB Complaint: Square actually responds to BBB complaints fairly quickly in my experience.
• Small Claims Court: If the hold period passes and they still won't release funds, you can sue in small claims. In Texas, limit is $20,000.

I'd start with the demand letter and BBB complaint simultaneously. The combination often gets attention faster than either alone.

Oh man I went thru this exact same thing last year. Square closed my account after a catering gig - they were holding like $6,500 of mine.

Here's what actually worked for me:

First I waited the 90 days because I didn't know any better. After 90 days they sent an email saying they were releasing my funds... minus a $500 "risk reserve" they decided to keep. I was furious.

I ended up filing a BBB complaint specifically about the $500 they kept. Within like 10 days someone from their "executive response team" called me. They ended up refunding the $500 and apologized.

Tips from my experience:

• Document EVERYTHING. Screenshot all your transaction history before they lock you out completely
• Get copies of any chargebacks or disputes on your account (there probably aren't any)
• In your BBB complaint, be specific about dollar amounts and dates
• Mention that you've been a customer for X years with no issues - they track loyalty

The waiting is the worst part. I'm really sorry your going thru this.

Jumping in with an important warning that most people don't know about.

The 90-day hold is actually the MINIMUM.

Square's terms allow them to hold funds for up to 270 days (that's 9 months!) if they're concerned about potential chargebacks. This is in Section 15.4 of their Payment Terms.

Why? Because customers can file chargebacks for up to 180 days on most credit cards, and Square wants to make sure they're not on the hook if a chargeback comes in after they release your money.

The 90-day timeline they quoted you is just for the "account review." After that, they might release most of your funds but keep a reserve, or they might extend the hold if they think there's chargeback risk.

For a food truck with in-person transactions, chargeback risk is pretty low, which is good. But I've seen cases where Square held funds for the full 270 days just because their algorithm flagged the account.

This is why the demand letter approach @James_BizLaw mentioned is important. It puts them on notice that you're not just going to wait quietly.

@TacoTruck_Mike any update on your situation?

I wanted to share what I did after Square terminated me last year. I had about $12k held and honestly the whole experience was a nightmare.

I filed complaints with:

• BBB (this seemed to get attention)
• CFPB (Consumer Financial Protection Bureau)
• California AG (where Square is headquartered)

I also sent a formal demand letter via certified mail. Got a template from a legal document site and customized it with all my specific details.

About 5 weeks after I sent everything, I got a call from someone at Square who was actually helpful. They released my funds minus about $800 in "fees" which honestly I was too exhausted to fight at that point.

The whole thing took about 7 weeks from deactivation to getting my money. Not ideal but better than 90+ days of waiting and hoping.

Not a lawyer but I work in payments and wanted to add some practical advice for after you get this resolved.

Alternatives to Square for food service businesses:

• Clover: More stable for higher-volume businesses. They're backed by Fiserv so they have deeper pockets and don't panic as easily. Higher monthly fee but way more reliable.
• Toast: Built specifically for food service. They understand the industry so spikes during festivals etc won't freak them out. Their hardware is solid too.
• Heartland: Old school processor but very stable. Less likely to randomly terminate you.

The issue with Square/PayPal/Stripe is they're designed for low-risk, consistent businesses. Any variability in your sales pattern can trigger their algorithms. Food trucks are inherently variable - you might do $200 on a slow Tuesday and $4,000 at a festival. Their systems see that as "suspicious activity."

For your next processor, I'd recommend calling them BEFORE big events to let them know you expect higher volume. Most processors have a way to flag this so it doesn't trigger fraud alerts.

Also - always have a backup processor. Run like 10% of your transactions through a second service so if one terminates you, you're not completely stuck.

UPDATE for everyone whos been following this:

I took yalls advice and went full offense. Filed BBB complaint, sent demand letter via certified mail (used that generator someone linked - super helpful), and filed with Texas AG consumer protection.

Got a call from Square "executive escalations" team about 3 weeks after I sent the demand letter. Lady was actually pretty nice and apologetic. She said my account was flagged by their automated system because of the "unusual transaction pattern" and that the termination was basically automatic.

Long story short - they released $7,400 of my funds last week. They kept about $600 as a "reserve" that they say will be released in another 60 days if no chargebacks come in. Not ideal but I can live with it.

I've already set up with Toast for my primary processing. Their sales guy actually knew about Square doing this to food trucks lol. Said they see it all the time.

Thanks everyone for the help. This forum literally saved my business. The demand letter especially seemed to get their attention - customer support told me it got escalated because of that.

@TacoTruck_Mike So glad you got most of your money back! Your timeline is actually pretty good - I've seen people wait 4+ months.

Quick question for anyone - does this same approach work for Stripe? I sell handmade jewelry at craft fairs and I'm worried about the same thing happening to me. Had a really good holiday season and my December was like 5x my normal volume.

@ArtisanMarkets_Jen Yes, similar approach works for Stripe. Their terms are structured similarly under their Services Agreement Section 22. The same regulatory bodies (CFPB, state AGs) have jurisdiction.

One difference: Stripe tends to be slightly more responsive to direct communication than Square in my experience. They have an appeals process that sometimes works if you can provide documentation proving your business is legitimate.

Pro tip: keep records of your craft fair booth registrations, vendor permits, and photos of your setup. If you ever get flagged, this documentation helps prove you're running a real business.

Adding my story here because this thread came up when I was researching my own Square nightmare.

My timeline:

• Week 1: Account frozen after a $3,200 deposit from a commercial landscaping job
• Week 2: Sent demand letter using template from this site
• Week 3: Filed BBB and Colorado AG complaints
• Week 4: Got automated email saying "review in progress"
• Week 5: Phone call from executive team, very apologetic
• Week 6: Full funds released, no reserve held!

Total held: $3,847. Total recovered: $3,847. Time: 38 days.

The demand letter was key. Rep specifically mentioned they escalated because of "formal legal correspondence."

Lurker here with a maybe dumb question...

If I send a demand letter, do I need to actually follow through with small claims court if they don't respond? Or is it just a threat? I don't want to bluff and then have them call it.

@NotALawyer_ButCurious Not a dumb question at all. Technically yes, you should be prepared to follow through. But realistically, most companies like Square settle before it gets to court because:

1. Court costs them money even if they win
2. It creates a public record
3. The amounts are usually small enough that it's not worth their legal team's time

That said, don't send a demand letter saying you'll sue in 10 days if you're not actually willing to file. Give yourself a reasonable timeline (30 days is standard) and be prepared to file if needed.

Small claims is honestly not that scary. Filing fee is usually under $100 and you don't need a lawyer.

Just want to say THIS WORKED FOR ME. Following this exact playbook.

Square was holding $4,200 from my bakery. Sent demand letter + BBB complaint on the same day. Got a call 19 days later. Money in my account within a week after that.

The woman on the phone actually said "we see you've filed multiple complaints and sent legal correspondence" - so they definitely track this stuff.

Thank you @TacoTruck_Mike for starting this thread and everyone who contributed. You saved my Valentine's Day season.

Gonna offer a slightly contrarian view here...

I work in fintech and while I totally understand the frustration, these automated systems exist for a reason. Payment fraud is a massive problem - processors lose billions annually to fraud and chargebacks.

The "spike in volume triggers shutdown" thing exists because that's literally the #1 pattern for stolen card fraud - someone gets access to a merchant account and runs a bunch of transactions quickly before the real owner notices.

That said, the WAY these companies handle legitimate merchants who get caught in the net is inexcusable. There should be a clear appeals process, a human review within 48-72 hours, and transparency about what triggered the flag.

The fact that you have to file BBB complaints and send demand letters to get a human to look at your account is a failure of their customer service, not their fraud detection.

@TechStartupHelper I get what your saying but the problem is the punishment doesnt fit the crime. Even if they need to flag accounts for review, why hold funds for 90-270 days? Why not do a quick review and release funds to legitimate businesses within a week?

And why can't they at least TELL you what triggered the flag? The "we can't disclose reasons" thing is ridiculous. If I knew it was the festival spike I could have provided documentation upfront.

Its not about them having fraud detection - its about them treating small business owners like criminals with no due process.

Found this thread through google and made an account just to share my experience.

I'm a caterer in Phoenix. Square terminated me in July 2022 holding $11,400. I did NOTHING for the first 60 days because I believed them when they said it would be resolved in 90 days.

Day 91: Got an email saying hold extended another 90 days for "continued review."

That's when I found this forum and started fighting back. Filed everything - BBB, Arizona AG, CFPB, demand letter. Also tweeted about it publicly (not sure if that helped but I was mad).

Got my money on Day 127. Almost $500 in "fees" deducted but at that point I just wanted it over.

Lesson: DON'T WAIT. Start the complaint process immediately.

Adding some legal context for those considering small claims court:

Under UCC Article 4A (Uniform Commercial Code), payment processors have certain obligations regarding fund transfers. While Square's TOS gives them broad discretion, courts have found that indefinite holds without legitimate cause can violate implied covenant of good faith and fair dealing.

Relevant cases to cite if you end up in court:

• PayPal, Inc. v. Consumer Financial Protection Bureau (9th Cir. 2021) - established that payment processors can be held to consumer protection standards
• State money transmission laws - Square is licensed as a money transmitter in all 50 states. Each state has regulations about timely fund release.

If you're in California, look up Financial Code Section 2102 regarding timely settlement of transactions.

Note: This isn't legal advice for your specific situation. Consult with an attorney in your jurisdiction.

Question - has anyone actually gone to small claims court against Square? What happened?

I'm at day 45 of my hold ($6,800) and honestly thinking about just filing now instead of waiting. The stress is killing me.

@ChicagoPizzaGuy I filed in Ohio small claims after 95 days with no resolution. Here's what happened:

1. Filed claim for $5,200 plus filing fee ($75)
2. Square was served at their registered agent address
3. About 2 weeks after service, I got a call from their legal department
4. They offered to settle for full amount plus my filing fee if I dismissed the case
5. I agreed, got my money, case dismissed

They never even went to the hearing. I think they calculate that it costs them more to send a lawyer to small claims court in Ohio than to just pay.

Filing was honestly easy. Just fill out a form at the courthouse, pay the fee, and they handle serving the defendant.

@VintageDealer_Ohio That's really helpful, thank you. How did you find their registered agent address for Ohio?

@ChicagoPizzaGuy Every state has a business entity search. For Ohio it's the Secretary of State website. Search "Block Inc" (that's Square's parent company) and it will show their registered agent.

Most states you can just Google "[state] business entity search" and find the database. Registered agent info is public record.

Ok so I'm dealing with this right now and I'm confused about one thing

Square sent me an email saying my funds will be released on a specific date (April 15). Should I still send a demand letter or just wait?

They're holding $2,300. Not as much as some of you but it's still a lot to me.

@NailsByBrenda I'd still send the demand letter. That date they gave you isn't guaranteed - their terms say they can extend holds at their discretion.

Think of the demand letter as insurance. If they release on April 15 like they said, great. If they try to extend, you've already got the paper trail started.

Also file BBB just to have it on record. Better to have submitted everything and not need it than to be scrambling if they change their mind.

Reading this thread and getting paranoid. I use Square for my farmers market booth and haven't had issues yet, but now I'm worried.

What can I do PREVENTATIVELY to avoid this happening to me? I have a big strawberry season coming up and will probably 3-4x my normal volume in May.

@GigFarmer2025 Good thinking! Here's a prevention checklist:

Before busy season:

• Contact Square support and let them know you expect higher volume. Ask them to note it on your account.
• Get this in writing if possible - email, chat transcript, anything.
• Set up a backup processor now (Clover, PayPal Zettle, whoever) and run a few test transactions so it's ready to go.
• Make sure your bank account and ID on file are 100% current.

During busy season:

• Don't let funds accumulate - transfer to your bank daily if possible.
• If you have a massive day, proactively email Square saying "hey, had a great market day, here's why volume was higher."
• Screenshot your transaction history regularly.

No guarantee this prevents issues but it shows good faith and gives you documentation if problems arise.

UPDATE from my post in another thread - wanted to share here since this one is more active.

After 67 days of holds and runarounds, I finally got my $3,100 back yesterday! Here's what I think made the difference:

I included photos of my craft booth, copies of my vendor permits, my LLC registration, and tax returns in my demand letter packet. Basically proved beyond doubt that I'm a real business.

The Square rep who called said "your documentation package was very thorough" which makes me think most people don't include that stuff.

So tip for everyone: don't just demand your money, PROVE you're legitimate. Make it easy for them to say yes.

Horror story that eventually had a happy ending:

Square terminated my restaurant account in August 2022 holding $23,000. Yes, twenty-three thousand dollars. We had just reopened after a renovation and did a huge grand reopening week.

The nightmare lasted 5 MONTHS. I filed everything - BBB, CFPB, California AG, New York AG (where I'm located), demand letters, the works. Nothing seemed to work.

Finally hired a lawyer. He sent one letter on law firm letterhead threatening suit under NY General Business Law 349 (deceptive practices) and suddenly Square wanted to talk.

Got full $23k released within 2 weeks of lawyer letter. Cost me $800 in legal fees but worth every penny.

My advice: if you're above $10k, consider getting a lawyer involved early. The letterhead carries weight.

@RestaurantRecovery Good outcome. NY GBL 349 is a powerful statute because it allows for attorney's fees and treble damages in egregious cases. Companies take it seriously.

For those doing cost-benefit on lawyers: many consumer protection attorneys will do a free consult. Some will take cases on contingency if the amount is high enough. Shop around.

For smaller amounts ($5k and under), the DIY demand letter + agency complaint route is usually sufficient and more cost-effective.

Just adding another data point - mobile auto detailing business here.

Funds held: $1,850
Time to resolution: 23 days
Method: Demand letter only (didn't even file BBB)

I think for smaller amounts they release faster because it's not worth their hassle. My letter was pretty aggressive though - cited the specific Texas Finance Code sections about money transmission and implied I'd been in contact with the Texas Department of Banking.

(I hadn't actually filed with them yet but the letter implied I was considering it.)

Point is: sometimes just the demand letter is enough if you sound like you know what you're doing.

Thank you all SO MUCH. I was literally in tears reading this thread last month when Square froze $5,600 of my Etsy craft show earnings.

Followed the advice here:

- Used the demand letter template
- Filed BBB complaint
- Filed with Michigan AG
- Documented everything with screenshots

Got my money back in 31 days. All of it - no fees taken!

The BBB complaint got a response first. Rep called me and was very professional. Said they "appreciated my patience" (lol) and would expedite the review.

Switching to SumUp for future craft shows. Friend uses them and says they're more lenient with variable volume.

I have to respectfully push back on some of the advice here...

I'm a business consultant and while the demand letter approach works, I think some people are being too aggressive too fast. Yes Square's process sucks, but burning bridges has consequences.

Consider this: If you ever want to use any Block Inc service again (Square, Cash App, Afterpay), an aggressive dispute on your record might flag you. Their systems are connected.

My approach with clients is usually:

Week 1-2: Polite but firm escalation through normal channels
Week 3-4: Demand letter if no progress
Week 5+: Agency complaints and legal threats

Not saying the aggressive approach is wrong - if you're done with Square forever, go nuclear. Just think about whether you might need their ecosystem later.

@SmallBizSteve Respectfully, if Square terminates your account they've already made the decision that they don't want your business. You're not burning a bridge that exists.

Once you're terminated, you're typically banned from the platform permanently anyway. The "relationship" is already over.

And frankly, why would you WANT to go back to a processor that held your money hostage? Plenty of alternatives that won't do this.

UPDATE: Remember I posted in March about waiting for April 15 release date?

April 15 came and went. No funds. Got an email on April 17 saying "review extended."

Good thing I took @KitchenOwner_Chris advice and had already sent demand letter and filed BBB. Got a call on April 22 and funds deposited April 25.

Moral of the story: their "release dates" mean nothing. File everything early.

Hey all - I run a regional food truck association and wanted to share that we're seeing a HUGE uptick in Square terminations this year. Way more than previous years.

We've started advising all our members to:

• Maintain two active payment processors at all times
• Never let more than one day's deposits accumulate in Square
• Pre-notify Square before any event expected to exceed 2x normal volume
• Keep this forum bookmarked (seriously, you all have been amazing)

We're also compiling data on terminations to potentially file a group complaint with the CFPB about the pattern of behavior. If you've been affected and want to be included, DM me.

Wow this thread really blew up! Glad my nightmare could help others.

Quick update from me: Got that $600 reserve they held finally released last week. So I'm now 100% whole. Took about 4 months total from start to finish for complete resolution.

Toast has been great btw. Did a big Cinco de Mayo event - 4x normal volume - and not a peep from them. Just a congratulatory email from my rep lol.

@FoodTruck_Alliance that's great you're organizing. This shouldn't keep happening to legitimate businesses.

Jumping in late but hoping someone can answer...

I got terminated and they're holding $890. Is it even worth the hassle of demand letters for that amount? Or should I just wait out the 90 days?

I'm not great at confrontation and the whole thing stresses me out tbh.

@ArtShow_Sandra Totally understand the stress. Honestly for $890, it depends on how much you need the money.

If you can afford to wait, the 90 days will probably pass and you'll get most of it back (maybe minus a small fee).

If you need it sooner, the demand letter isn't as scary as it sounds. You literally just fill in a template, print it, and mail it certified. Takes like 20 minutes.

The generator on this site does most of the work for you. Just plug in your info.

At minimum I'd file a BBB complaint - that's just an online form and takes 5 minutes. No confrontation required.

Wedding DJ here. Square terminated me holding $7,200 after a busy May wedding season.

The kicker? I've been using Square for 6 YEARS. Perfect record. Zero chargebacks ever. And they just... terminated me.

Already sent demand letter and filed everywhere based on this thread. Day 8 so far. Will update.

One thing I learned: Square apparently shares termination data with other processors through something called the MATCH list (Member Alert to Control High-Risk Merchants). So getting terminated by one processor can affect your ability to get approved elsewhere.

Anyone know if there's a way to check if you're on this list or dispute it?

@DJServices_Marcus Good question about MATCH. Here's what you need to know:

The MATCH list (formerly TMF - Terminated Merchant File) is maintained by Mastercard. Processors can add merchants for specific reasons like fraud, excessive chargebacks, etc.

However, "risk assessment termination" by itself isn't necessarily a MATCH-listable offense. They're supposed to only add you for specific violations.

To find out if you're on MATCH: you have to ask through your new processor when you apply. There's no direct consumer access to the list.

If you ARE listed improperly, you can dispute it. Under the Fair Credit Reporting Act, lists like MATCH may be considered consumer reports, giving you rights to dispute inaccuracies.

Toast, Clover, and most established processors will tell you during onboarding if you're on MATCH and often still work with you if the listing seems unjustified.

I sell vintage clothing and just had my account reinstated WITHOUT having to file anything. Wanted to share in case it helps someone.

What I did differently: I replied to the termination email with a VERY detailed explanation of my business, attached my resale license, photos of my store, and asked specifically what triggered the review.

Two days later I got a response saying they "reviewed additional information" and were reactivating my account. No funds were ever held.

I think the key was responding immediately and thoroughly before the hold kicked in. Not sure if this works for everyone but if you catch it early, try the documentation approach first.

UPDATE: Day 17, got the call from Square executive team. $7,200 being released, should hit my account in 3-5 business days.

The rep said my "extensive documentation" and "formal legal correspondence" prompted the escalation. Also mentioned that the BBB complaint "flagged my account for priority review."

So the formula really does work: Demand letter + BBB + AG complaints = results.

Also good news - signed up with Stripe and they said I'm NOT on MATCH. So Square didn't list me, thankfully.

Thanks everyone in this thread. You saved me from a very stressful summer.

Adding my experience for the data pool:

Business: Custom furniture, sold at craft fairs
Amount held: $4,350
Trigger: $2,800 single transaction (sold a dining table set)
Actions taken: Demand letter, BBB, Pennsylvania AG
Time to resolution: 28 days
Amount recovered: $4,350 (full amount, no fees)

The single large transaction is what did it. Apparently their system flags anything over ~$2k in a single charge as suspicious.

Pro tip: if you sell high-ticket items, consider splitting into deposit + balance payments. Annoying but might avoid triggering their algorithms.

Can we talk about how INSANE it is that a company can just take our money with no recourse?

I get that they need fraud protection. I really do. But there has to be a better system than "freeze everything and let them wait 3 months."

Banks can't do this. If a bank froze your account for 90 days with no explanation, regulators would be all over them. Why do payment processors get a free pass?

We need actual legislation on this. Not just individual complaints - systemic change.

Sorry for the rant. Just got my account terminated (holding $8,900) and I'm furious.

@AngryRestaurateur You're actually touching on a real regulatory gap. Payment processors like Square operate as "money transmitters" rather than banks, which means different (looser) regulations.

The CFPB has been looking at this issue. In 2023 they published guidance about payment app consumer protections, but enforcement has been slow.

Some states are starting to act. California passed AB 2342 requiring faster resolution timelines for merchant disputes. New York has similar legislation pending.

Until federal law catches up, the AG complaint + legal pressure approach is the best individuals can do. But you're right - it shouldn't be this hard.

Quick question - I'm a personal trainer and I use Square for session payments. Amounts are pretty consistent ($75-150 per session), but I'm starting to sell training packages ($500-800 upfront).

Should I be worried about the larger package sales triggering this? Or is it more about sudden changes in pattern?

@PersonalTrainer_Gina It's more about sudden changes. If you've been doing $75-150 for a while and suddenly start doing $500-800, that COULD trigger a review.

My suggestions:

• Start the package sales gradually if possible
• Consider emailing Square proactively: "Hey, I'm adding training packages to my offerings, expect to see some larger transactions starting [date]"
• Keep documentation ready (training certifications, client contracts, etc.)
• Set up a backup processor before you start, just in case

You're probably fine for amounts under $1k, but better to be prepared.

Just discovered this thread and I'm having flashbacks. Square terminated me in 2022 and held $14,000 for SEVEN MONTHS.

I didn't know about this forum back then. I just kept calling customer service and getting nowhere. Finally got my money after 212 days.

Wish I'd found this earlier. Would have saved me half a year of stress.

Bookmarking this thread to share with every small business owner I know. This information needs to be more widely available.

Been following this thread for months. Finally made an account to say THANK YOU.

Square froze my etsy shop earnings ($2,100) in June. Used everything from this thread:

• Demand letter template from the site
• BBB complaint
• State AG (Virginia)
• Included all my business documentation

22 days later, money in my account. Full amount.

The system works. It shouldn't be necessary, but it works.

UPDATE from my angry rant last month:

$8,900 recovered in 33 days. Followed the playbook exactly.

Still angry at the system but grateful for this community. Already switched to Toast and couldn't be happier.

One thing I'll add: I also filed with the Federal Trade Commission (FTC). Not sure if it helped but figured couldn't hurt. ftc.gov/complaint for anyone interested.

HVAC contractor here. Different industry but same story.

Had a big commercial job - $9,500 payment through Square. Account frozen next day.

What worked for me: I actually called the commercial client and explained the situation. They provided a letter confirming the payment was legitimate and that services were rendered satisfactorily.

Included that client letter with my demand letter. Rep mentioned it specifically as helpful documentation.

Funds released in 19 days. Full amount.

Tip: if you have the relationship with your customer, ask them to help document the legitimacy. Third party verification carries weight.

Quick tip that hasn't been mentioned: check if your state has a Department of Financial Institutions or Division of Banking separate from the AG.

In Wisconsin, I filed with both the AG AND the Division of Financial Institutions. The DFI complaint actually got a faster response because they specifically regulate money transmitters.

Not all states have this, but worth checking. Sometimes the specialized regulator is more effective than the general AG consumer protection division.

Can't believe this thread is still going strong 8 months later. Shows how widespread this problem is.

For anyone new finding this - the summary at the top is accurate. The combination approach works:

1. Demand letter (use the template)
2. BBB complaint
3. State AG and/or financial regulator
4. CFPB for good measure
5. Include documentation proving you're legitimate

Average resolution time based on this thread seems to be 3-5 weeks if you're proactive. 90+ days if you just wait.

Don't be passive. Fight for your money.

Just want to confirm this works even for small amounts.

Amount held: $673
Actions: BBB complaint only (was intimidated by demand letter)
Time: 18 days
Result: Full release

The BBB complaint alone was enough for my small amount. Rep said they were "sorry for the inconvenience" and processed release immediately.

For anyone nervous about formal letters - even just the BBB complaint helps. Something is better than nothing.

Update on the group CFPB complaint I mentioned back in May:

We submitted a formal complaint on behalf of 23 food truck operators who experienced similar terminations. The CFPB acknowledged receipt and opened an investigation.

No resolution yet, but they've requested detailed documentation from us. This is more than we expected honestly.

If this leads to any systemic change, I'll update the thread. In the meantime, keep filing your individual complaints - they build the case for patterns of behavior.

Small hardware store owner. Been using Square 4 years, just got terminated after selling a $3,400 generator during hurricane season. Great timing on their part...

Holding $6,200. Already filed everything based on this thread. Day 3.

What kills me is these are EMERGENCY purchases. People needed generators for the storm. And Square decides that's "suspicious activity."

Will update with timeline.

UPDATE: 13 days, full $6,200 released.

Fastest resolution I've seen in this thread. I think mentioning hurricane emergency in all my complaints helped. Rep actually apologized specifically for "the timing during a natural disaster."

Switched to Clover. Their rep said they have protocols for seasonal/weather-related volume spikes specifically because they work with a lot of hardware stores.

This thread works. Thank you all.

Wanted to share a legal development that might be relevant:

A class action was recently certified against PayPal for similar fund-holding practices: Rodriguez v. PayPal Holdings, Inc. in the Northern District of California.

The complaint alleges breach of contract and violation of California's Unfair Competition Law. While PayPal isn't Square, they're both Block Inc. subsidiaries and have similar terms.

If you've had funds held for extended periods and want to explore whether you might be part of any potential class action, consulting with a consumer rights attorney might be worthwhile. Many offer free consultations.

This doesn't replace the individual complaint approach - still do that for immediate resolution - but there may be additional remedies down the line.

This thread is GOLD. Sharing my data point:

Side business selling vintage items at flea markets. Square terminated after a really good weekend ($1,800 in sales when I usually do $300-400).

Amount held: $2,340
Actions: Demand letter + BBB
Documentation included: Flea market vendor contracts, photos of my booth, receipts from items I purchased for resale
Resolution time: 24 days
Amount recovered: Full amount

The photos of my booth seemed to help. Shows I'm a real person selling real stuff, not some fraudster.

Question before I start a business - after reading all this, should I just avoid Square altogether? I'm opening a coffee cart next month.

What processors do you all actually recommend for mobile food businesses?

@NewMerchant2026 My recommendations for mobile food:

Primary options:

• Toast Go: Best for food service, understands the industry. Slightly higher monthly fee but very reliable.
• Clover Go: Good mobile option, Fiserv backing means stability.
• PayPal Zettle: Easy setup, decent for low-medium volume. Similar risks to Square but slightly better in my experience.

Always do this:

• Have TWO processors from day one
• Split transactions between them (80/20 or 70/30)
• Transfer funds daily, don't let them accumulate
• Notify your processor before big events

Square isn't necessarily bad if you follow the precautions. Just don't put all your eggs in one basket.

Almost a year since my original post. Wild to see how much this thread has grown.

Final update from me: Been using Toast for 10 months now with zero issues. Had multiple festival weekends with 4-5x normal volume. No freezes, no scary emails, just a rep checking in to make sure things are going well.

The difference between how Toast treats food vendors vs how Square treated us is night and day.

For anyone reading this in the future: you're not alone, this isn't your fault, and there ARE solutions. Follow the advice in this thread and you'll get your money back.

Good luck everyone.

Spent 20 years in the payments industry. Wanted to share some insider perspective.

The problem isn't the fraud detection - it's the INCENTIVE STRUCTURE. Square's risk team is evaluated on fraud losses, not merchant satisfaction. So they over-terminate because a false positive (legitimate merchant terminated) costs them nothing, but a false negative (fraudster not caught) costs them money.

The only way this changes is if false positives start costing them - through lawsuits, regulatory action, or merchants leaving en masse.

Every complaint you file, every demand letter you send, every merchant who switches to a competitor - it all adds up. You're not just fighting for your money. You're contributing to systemic pressure for change.

Keep fighting.

Creating an account just to add my success story.

Beekeeping business (yes, really). Square held $3,200 after a big farmers market during honey harvest season.

Used the demand letter generator, filed BBB, and included photos of my apiaries and my USDA organic certification.

26 days. Full amount. Rep even commented that my documentation was "very thorough and helpful."

Switched to SumUp for 2027 season. Smaller company, but they specialize in farmers market vendors and seem to understand seasonal businesses.

Thank you everyone who shared their experiences. This thread is a lifesaver.

Happy new year everyone. Major update on our CFPB group complaint:

The CFPB has issued a formal inquiry to Block Inc (Square's parent) regarding their fund-holding practices. This isn't public enforcement yet, but it's a significant step.

We've been told the investigation is ongoing and could lead to formal enforcement action if they find systemic violations.

This thread and others like it helped build the case. Every story matters. Every complaint matters.

Will update when we know more. In the meantime, keep documenting and reporting your experiences.

One year after the original post, and this thread has become an incredible resource. The community knowledge here is remarkable.

Summary of what we've learned:

• The demand letter + BBB + AG complaint combination is consistently effective
• Average resolution time with proactive approach: 3-5 weeks
• Including business documentation significantly speeds resolution
• Small claims court is effective but usually not necessary if you file complaints early
• Larger amounts ($10k+) may benefit from attorney involvement
• Always maintain backup payment processors

To everyone who's shared their experience: you've helped countless other small business owners. That's what communities are for.

Stay vigilant, document everything, and don't let anyone hold your money hostage.