Also, their ToS are pretty clear that they can do whatever they want, based on their beliefs, and there are no explicit limits how long they can keep your funds, or even obligations to talk to you. It might work differently in the EU, where they are registered as a bank (and so are regulated as a bank), but in US that's not the case IIRC.
The behavior is not all that unexpected - it's easier and cheaper to loose a customer receiving a lot of complaints than to inspect each of the complaints. So while I understand this is pretty damaging and dislike what PayPal does, I'm surprised that people are surprised.
I belong to the second category. Also, it becomes harder to avoid such companies at all, for example cell phone operators in Europe universally view their "customers" as billable addresses; some find it cheaper to settle billing disputes in court (and lose a great percentage of the cases) than to maintain a "customer" service.
With mobile the solution is to go prepaid.
I'm baffled by this. Paypal does not. 28 days ago I wrote this comment on HN: https://news.ycombinator.com/item?id=13624393. I'm sure that in the future I'll be reading another Paypal horror story from someone like you, who somehow thought, "It won't happen to me!"
E.g., I don't go to USA conferences because of the TSA risk, people find it funny, yet I keep hearing horror story after horror story. For Paypal, though, people take the risk unknowingly because they aren't aware of Paypal's reputation, which is more understandable.
For example, once you subscribe to a cable TV / cell phone operator / whatever, they'll keep you on that subscription until the contract ends, even if new customers can sign up for half the price. And even then it's a matter of how much you spend with them and if it's worth negotiating a better contract.
This has little to do with the corporations being intentionally 'evil', it's more about insufficient competition or even monopoly (how many cable TV operators / ISPs are in your area?). We have multiple cell phone operators over here, but they have little incentive to compete - the number of people leaving/joining each operator is about the same, and if one operator decreases the prices the others will do the same, eliminating any advantage.
Sure, and bottom-shelf plastic-bottle vodka says "PREMIUM QUALITY" on the label
Given the regs that paypal thinks it must abide, specifically the many vague US antiterror rules, anyone getting into bed with them runs massive risk. The internet is full of stories exactly like this. The only hope is to rally enough of social media, or a tv show, that a human being at paypal takes pitty in you.