This isn't a theoretical case. I had this happen with regularity, and I'm sure many others have too.

I ran an online business and one of my competitors hired someone to constantly email PayPal and tell them I was selling CSAM. PayPal has literally no option other than to instantly lock your account against all transactions. Luckily I was putting so much money through PayPal I had my own account manager, but they still have a script they have to work through where they have to go through every part of your web site to make sure the report is false before they can open your account back up, which takes 3-7 days on average.