Jane Burton (not the real name) lost $2500 after PayPal froze her account. I can identify with this story because a few years back it happened to me. PayPal froze my account which had a balance of $1200 claiming suspicious activity. The suspicious activity was just me testing an Instant Payment notification script I was working on for a dating software I was developing. They didn’t have the sandbox testing ground at that time. I kept sending a penny to my account trying to test the communication between PayPal and my server. I can appreciate why they became suspicious, and I’m glad they eventually unfroze my account but it took a while to get my money back. Had to fax them a million and 1 documents first.

Here’s Jane’s story:

I used PayPal to collect a payment in the amount of $2500 for legal services I provided a client. I went to withdraw my payment only to find my account had been frozen for some unknown reason. I called PayPal in a fit. I can admit I probably should have tried to stay calm but even so, just because a customer is having a fit doesn’t make it okay for the customer service representative to retaliate. So I’m shouting at the customer service rep and he starts to get pissed off and starts shouting back at me and hangs up the phone without answering any of my questions.

I called again, this time trying my best to stay calm, but it was as if the first guy had put some kind of notation with my account because the new person was being rude right from the get go. She practically shouted at me that my account had been frozen because of suspicious activity. I asked her what suspicious activity. She tells me I received a large payment to my account. I ask her how is that suspicious? I performed a service for another attorney living in another state and we agreed he’d send the payment via PayPal. What was so suspicious about that? She tells me that I have to fax them my drivers license, bank account statement and several other documents in order to assist them with resolving the problem.

I fax them the documents but don’t hear anything from them so I call them back and they’re still being rude. This new guy starts telling me that the name on my drivers license doesn’t match the name on my bank statement. My bank statement doesn’t have my middle initial but aside from that the names are the same. I’m seeing red by now. I tell him I’m a lawyer and won’t hesitate to sue PayPal. He hangs up the phone on me.

I never did get my money. I got so fed up I told them to close the account. They said they couldn’t close it while there was an investigation pending or some such thing. I don’t know how they resolved it. No one’s contacted me by phone or email and the last time I tried to login to the account I couldn’t get in. I decided to just let it go rather than take on the hassle of trying to sue them. Needless to say I’m one of those who fully agrees that PayPal sucks.