“Help! My PayPal account has been limited! What do I do?”
You may have heard this from your friends or peers more than once in a single lifetime, and stories of people having money in their PayPal account frozen are more common than you think. I’ve heard my own share of stories from business associates and friends who had their accounts limited, and their funds held for apparently no reason at all.

Lest you think PayPal did this on purpose, just because they can, let it be known that their policies are almost the same as Visa and MasterCard – meaning to say that it is perfectly okay for PayPal to withhold your funds for 180 days from the date that your account was frozen.

Why PayPal freezes accounts
From the moment you created a PayPal account, you are bound by their rules. This means that you agree to their terms, and their policies including the one where they can limit your account for 180 days. But why do they do this? In a way, PayPal performs counter-measures to curb fraudulent activities all the time. Yes, 24 hours a day, 7 days a week. PayPal does this via automated system as well as a human managed system. If there’s been some transactions that are a little out of ordinary, PayPal will use their best judgement to freeze your account, investigate and while you wait for 6 months for them to review their decision.

Why YOU could be the next victim of PayPal’s random account-freezing

• Sudden increase in amount of transactions
• Increase in a single transaction amount
• Increasing amount of disputes reported against you
• PayPal thinks that you may be indulging in fraudulent activities
• Logging in to your PayPal account from vastly different IPs i.e. business in United States but logging in from China
• Withdrawing too much in one go

Lastly, do note that not all PayPal horror stories end well, horribly. Most users reported that they have gotten their funds back, although not instantly, provided that they did not engage in fraudulent activities or any sort of money laundering scheme. If not, users can and should contest PayPal’s decision to withhold your money, especially if the sum is a sizeable one.

Breaking news! It seems that PayPal is halting personal payment transactions In India. Stay tuned for more after this post.

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