Square terminated my account out of nowhere — holding $14K and no explanation

I own a small massage therapy practice. Been using Square for 2 years with zero issues. Woke up yesterday to find my account completely deactivated.

Email says I'm terminated for "prohibited business activity" and they're holding $14,200 in my balance for 90 days. Massage therapy isn't on their prohibited list - I checked multiple times.

Called support 4 times. Every time they say there's nothing they can do and the decision is final. They won't even tell me what policy I supposedly violated.

What are my options here? I have clients scheduled this week and literally cannot accept payments. This is destroying my business.

This happens to massage therapists ALL THE TIME with Square. Their algorithm can't tell the difference between legitimate massage therapy and... other services. Super frustrating.

Same thing happened to me last year. I appealed with my state massage license, business license, and professional liability insurance. Still got denied. Square doesn't want to deal with any industry that has any "reputational risk" even if you're 100% legit.

I ended up switching to a traditional merchant account. More expensive but at least they understand my business.

The problem with Square (and all aggregators like Stripe, PayPal) is you're sharing their master merchant account. They can dump you anytime with no recourse because from Visa's perspective, you're not even a merchant - Square is.

For "sensitive" industries like massage, acupuncture, chiropractors, CBD, firearms dealers, etc. you need a dedicated merchant account through a traditional processor or bank. They actually underwrite your specific business so they can't just flip a switch on you.

Options to look into:

• Helcim: Good for small businesses, works with most industries
• Clover: Owned by Fiserv, handles massage/spa businesses
• Local bank merchant services: Your bank might offer processing
• Industry-specific processors: There are processors that specialize in wellness/spa

Regarding the $14K being held - this is the more urgent issue. Square's terms allow them to hold funds for 90-120 days after termination, but you have options to speed this up:

Step 1: Formal Demand Letter

Send a certified letter to Square's legal department demanding immediate release of funds. Include your massage license, business license, liability insurance, and any other proof that you're a legitimate, licensed healthcare provider. Make clear this is not a "prohibited" business.

Address: Block, Inc., Legal Department, 1455 Market Street, Suite 600, San Francisco, CA 94103

Step 2: CFPB Complaint

File a complaint at consumerfinance.gov. Be specific about the wrongful termination and fund hold. Square (Block) must respond within 15 days.

Step 3: State Regulator

If you're in California, file with the DFPI as well. Square is licensed as a money transmitter and has to answer to state regulators.

We have templates at /Demand-Letters/Platforms/ that cover wrongful termination and fund holds.

For immediate payment needs while you sort this out: most of the alternatives can get you approved in 1-3 days.

I got dumped by Square for my gun shop (which WAS on their prohibited list, my bad). Had Helcim up and running in 48 hours. Not as slick as Square's interface but it works.

Also consider having a Venmo Business or Zelle as backup for regulars who are flexible. Not ideal but keeps cash flowing while you set up a real processor.

Quick update: Filed CFPB complaint and sent demand letter yesterday. Also started application with Clover - they said massage therapy is fine as long as I have my state license.

In the meantime I'm accepting Venmo and Zelle from regular clients. Not great but keeping the lights on.

One thing I learned: when you apply for a new processor, be super specific about your business type. I listed myself as "massage therapy" on Square originally. On Clover I put "Licensed Massage Therapy - Medical/Therapeutic" with my license number. Being specific apparently helps avoid misclassification.

Same industry, same problem last year. What worked for me:

I ended up getting a merchant account through my professional association (AMTA has partnerships with processors who understand massage therapy). The rates are actually competitive and they know the difference between legit MT and sketchy stuff.

Also - keep your state license, liability insurance, and maybe a letter from your landlord confirming your business address all in one folder. You'll need to prove legitimacy to every new processor.

FINAL UPDATE:

CFPB complaint worked. Got a call from Square's "Seller Resolution Team" (didn't know that existed) on Dec 18. After reviewing my documentation, they released my $14,200 - took about 10 days from complaint to funds in my bank.

They didn't reinstate my account though. Said the termination stands but my funds would be released since I'm clearly legitimate. Whatever, I'm done with them anyway.

Now using Clover as primary processor. More setup than Square but at least they understood my business from day one. Also keeping a backup with Stripe for online booking deposits.

Lessons learned:

• Never rely on a single processor
• Keep all licenses and documentation organized
• CFPB complaints actually work
• Aggregators (Square, Stripe, PayPal) are convenient but risky for "gray area" industries

Thanks everyone for the help.