Online payment platforms such as PayPal have made it extremely convenient and cheaper to shop online, pay bills, and transfer money.
Besides, using PayPal and other electronic payment platforms protects customers from credit card fraud and other forms of online scams.
PayPal is also a convenient eCommerce payment gateway for businesses that want to increase their online sales.
Unfortunately, one of the disadvantages of using PayPal is that you may find your account randomly frozen. This is a common occurrence, and a simple online search for the words “PayPal froze my account” will give you numerous complaints from customers who have gone through the ordeal of a limited PayPal account.
A frozen PayPal account means you’re restricted from sending or withdrawing money. It also means that any funds that you might have in your account will remain frozen for the duration your account is limited.
If you’ve had your PayPal account frozen, you probably wondered the reasons behind this predicament and if there are things you could have done to protect it from the limitation.
Well, in this article, we explore the reasons PayPal limits accounts and how to unfreeze PayPal account for both individual and business users.
Why PayPal May Limit or Freeze Your Account
Contrary to what you might think, PayPal doesn’t freeze your account because it has a personal vendetta against you. To understand why PayPal limits accounts, you have to understand that when using PayPal as a payment platform, the company allows you to operate under its umbrella merchant account.
Unfortunately, this also means that PayPal has to be on the lookout for any fraudulent activity from the customers operating under their master merchant account. This is why any slight detection of unusual activity on your account will get it frozen. The bad news is that PayPal has a long list of unusual activities that can result in your account being limited.
Let’s look at ten such triggers that can get your PayPal account frozen.
- An unusual increase in your account transaction volume
- Receiving a huge sum of money in your account
- Customers’ complaints to PayPal against your business
- Logging into your account from a suspicious location
- A low credit score
- Violating PayPal’s user agreement
- Receiving many refund or chargeback requests from customers
- Using multiple IP addresses to access your account
- Inaccurate or outdated personal information on your PayPal account
- Using an unverified PayPal account
How Do I Know Whether My Account Is Frozen by PayPal
Once PayPal considers it right to freeze your account, they’ll email you. In most cases, they won’t go into detail on the reasons why your account was frozen.
In the scenario that the email from PayPal ends up in the spam or junk folder, you’ll know your account is frozen once you log in to your PayPal account.
To know why your account was frozen, you’ll need to call PayPal or contact them through the resolution center.
What Measures to Take to Unfreeze a PayPal Account
To unfreeze your PayPal account, here are the steps you’ll need to follow:
- Log in to your frozen PayPal account
- You’ll be directed to the resolution center
- Read the information on this page and follow the steps given for unfreezing your account
- Don’t forget to provide PayPal with any documentation they might require
Once PayPal receives the requested documentation, they’ll request you to wait as they review your account. The company will later provide you with an update email detailing the decision they have reached regarding your account limitation.
What Happens If PayPal Doesn’t Unfreeze My Account?
In some instances, PayPal may decide not to reinstate your account. In such a case, they’ll ask you to wait 180 days (six months) to get any funds left in your account. You’ll agree with us that this is a very long period of time to wait for your funds to be unfrozen. To expedite this process, you can call the PayPal customer care team and provide them with any additional documents they might need.
Unfortunately, some businesses must wait six months to get their money back. If you’re one such business, you don’t have to close your shop due to the PayPal limitation. You can always open another PayPal account or use another electronic payment platform to ensure your business continues running despite the limitation.
Unfortunately, if your account was flagged due to illegal activity or for being high risk, such solutions will only serve you temporarily. The best alternative that will give you a permanent solution is to open a high-risk merchant account.
A merchant account provider such as eMerchant Authority will keep your business running without the fear of account limitations and restrictions. Such an account will also offer a permanent payment solution to customers who want to make payments using a credit or debit card.
How to Prevent PayPal from Freezing Your Account
As mentioned earlier, once your PayPal account is limited, PayPal will freeze any funds in your account for 180 days or longer. This is an insanely long period to have your funds frozen, so you need to learn how to prevent your account from getting limited.
The best way to keep your account from being limited is to contact PayPal and ask them whether your account has any limitations regarding the amount of money you can receive.
Also, contact PayPal in case you’re about to receive a large sum of money so that the company can expect the transaction.
Thirdly, update your PayPal account details and ensure the name, phone number, and address you use on your account match the same information on your credit card and bank account.
You also need to use trackable shipping services to ship your physical goods so that you’re able to provide documentation when required.
PayPal is a convenient payment platform for both online sellers and buyers.
Unfortunately, PayPal has strict terms, and any slight violation of these terms often results in account limitation.
If you’re a victim of a limited PayPal account, you know it’s a very frustrating experience, especially because you have to wait months to get your frozen funds.
Hopefully, after reading this article, you now know the common reasons why PayPal freezes accounts, how to unfreeze your limited PayPal account and how you can protect your account from getting limited.