Over the last several years I was running a very successful VPN proxy server business online. We had more 4000 Active subscribers who were all the set up with PayPal. We spent more than $10K every month to acquire new subscribers via Facebook and AdWords ads.
Never ever thought it would be possible that PayPal was limiting our account because our business was 100% legal and within the law.
“We are hereby notifying you that, after a recent review of your account activity, it has been determined that you are in violation of PayPal’s Acceptable Use Policy regarding your sales/offers on your website. Therefore, your account has been permanently limited.
Per the User Agreement, when PayPal permanently limits an account due to an Acceptable Use Policy violation, we may hold your funds up to 180 days. In Addition, you will be liable to PayPal for a number of PayPal’s damages For each violation of the Acceptable Use Policy.”
First I thought this might be some kind of mistake and someone at PayPal, send us this by error. I called the PayPal support hotline and to my disbelief, it was told that my PayPal account was and indefinitely limited.
I also asked the customer service representative how it is possible that many other VPN companies where still allowed to use PayPal to process payments for their VPN services.
The call center agent was not able to give me any reason why PayPal is treating small sellers differently than larger companies. I was in so much shock that I have lost all those 4000 active subscribers overnight, I have spent so much money on to acquire. I never felt treated so unfairly in my entire life. How could PayPal limit my account even I wasn’t doing anything illegal.
After that phone conversation with PayPal, I decided to appeal the decision of freezing my account and removing all active subscribers. I even used a physical letter to appeal the account limitation.
I waited several days and I did not get any reply. I thought opening a new PayPal account might be possible, but I was confident that the same thing would happen again because for some reason certain rules don’t seem to apply for the major VPN providers online.
Dealing as a seller with PayPal is very difficult because you will have to deal with extremely incompetent staff as well with a company culture, which seems to be hostile towards their customers.
I can guarantee that if you ask your family and friends about that experience with PayPal, you have several cases where people had their PayPal account limited unfairly.
After this experience I decided that the only way to deal with PayPal is by running several accounts at the same time. The most important thing is that every PayPal account has to be independent and not linked to any other account. If you are running your business and you want to make sure that you have no issues processing payments, the only solution is to have several PayPal accounts which are not linked together.
Also make sure you never keep any significant balance inside your PayPal accounts, because as soon as your account gets limited that money will be held for 180 days. During those six months, you’ll have no access to that money you will not be able to use this money to buy goods or to invest in your business.
I totally understand that PayPal has to create certain safety features to ensure that people don’t do any fraudulent thanks online and scam people out of money. However, I believe there is no justification how PayPal treats their customers. If you search online ‘PayPal account limited’ or ‘PayPal account frozen’ you will find almost half million search results dealing with this issue.
If your PayPal account has been limited or frozen, please leave a comment below so we can fight back together and learn from each other.