Why Does PayPal Restrict/Limit Accounts?

02/09/2021

PayPal is a popular payment avenue, but users are always at the risk of temporary or permanent account restrictions.

But why does PayPal restrict accounts? Discover everything you should know about PayPal account limitations below.

PayPal Account Restricted? What Does it Mean?

Account restrictions are a widespread problem among PayPal users. In essence, they can happen to anybody–no matter how legitimate your transactions are. 

As long as PayPal’s algorithm detects any activity it considers suspicious; you’ll most likely be denied access to essential services like sending, withdrawing, or receiving funds.

Users suffer when they are unable to perform such actions. But the most affected are micro-entrepreneurs who use the platform for business purposes as they are denied access to funds and the ability to accept payments or pay vendors.

Why Does PayPal Limit Accounts?

Your PayPal account could be restricted for many different reasons. The only way to tell why your particular account was limited is to check the details in your account.

Often, PayPal will send you a notification email informing you that your account has been limited. However,  you also want to watch out for phishing emails with such info.

To confirm, sign in to your account and go to PayPal’s Resolution Center to check the reasons why you’ve been restricted.

 Below are some of the most common reasons according to a PayPal article:

  1. If you Violate PayPal’s Terms of Use

PayPal has a ‘term of use’ that all account holders must adhere to. Violating these terms may lead to temporary or permanent restrictions. For instance, trading regulated goods through PayPal’s platform can lead to account limitations.

  1. If PayPal Detects Unauthorized Access to Your Account:

PayPal may also limit an account if it detects unauthorized access. For such situations, PayPal will restrict the sending and withdrawal functions to safeguard your money from fraudulent spending.

  1. If PayPal Detects Strange Transactions

PayPal monitors your transactions closely. An unprecedented spike in their value and volume of can raise red flags on your account. For instance, if you increase the price of your items, PayPal may flag you temporarily to investigate the matter.

  1. Excessive Shopper Complains or Chargebacks

PayPal may also limit your account if it detects multiple shopper complaints (of goods not delivered) or mounting chargebacks due to lost customer cases.

Final Words

Whether PayPal lifts the limitations in your account depends on how satisfied the company is with the proof you submit. Always check the Resolution Center to learn why you have been restricted and the verification documents you should submit to resolve the case.

Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the Co-Founder of eMerchantBroker, the highest-rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.