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Comment by redox99 | Hacker News Reader

Blows my mind that that's legal. If they lock your account they should be obliged to still show a form to withdraw to a bank account you own.

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Most financial regulation enables payment providers to have unlimited period of account freeze even for the suspect of money laundering. Payment providers are legally shielded for any liability if they are concerned about money laundering. A mere abnormal transaction volume or a single transaction is enough for suspicion. The regulation is so single sided that any financial institution cannot even reply to your messages regarding such cases, as they have criminal liability on “tipping money launderers.”

PayPal just happens to be one of the most used online payment providers, being very trigger happy on this one due to pressure from regulators. This makes PayPal unideal for any businesses that deal with digital goods.

In an ideal world, that would go into an escrow account which the processor would not be allowed to benefit from--to remove the trigger happy incentives-- and which would have an arbitration route for the merchant.

What is the official way that someone whose account is wrongfully frozen is supposed to get their money back? There has to be some answer, at least for US citizens or foreigners in the US whose assets are wrongfully frozen due to the effects of US law... every civil or criminal forfeiture law in the US provides some way for the property owner to challenge the seizure, usually involving filing or defending some kind of court action. I assume that it would be unconstitutional in the US for that not to be possible.

Sue them.

It wouldn't blow your mind if you did a bit of research.

Payment processors will ALL (including stripe, authorize, adyen, etc) lock your account (with your money still in it!) if:

1) You're taking money for a product that will be delivered in the distant future (like tickets for an event, or preorders)

2) Your account has a sudden change in ticket size or quantity

3) You're violating their TOS. On HN that might look like a service that winks about piracy, or being a spamming tool.

Ever since I learned about this ~10 years ago, I've been looking into the details every time someone gets their account shut down, and it's always the above. The way people describe what happened to them to carefully leave out one of those points prevents it from ever being shocking.

I have trouble believing that you were always able to get to the bottom of it and determine it to be one of these causes, not only because it entails a remarkable ability to connect with many otherwise unresponsive posters, and the because it’s so easy for a person to read a challenging story and just assume that missing pieces would make it fit a prior conviction, but because it’d be pretty remarkable if I’m really the end of your ten-year streak. Hi. PayPal stole from me and I fit none of those points. I had a personal account, a friend made a habit of repaying me via PayPal despite my already knowing better, PayPal allowed it for a while then switched to accepting transfers to my account but barring withdrawals or return transfers, in effect taking out a non-consensual unannounced month-long loan from me. You can tell me how PayPal may have become confused and incorrectly believed I’m taking pre-orders, breaking their TOS, money laundering, etc, but those beliefs are factually incorrect, my usage was not inappropriate, and it’s very different to say “PayPal only does it when X” and “PayPal only does it when they believe X, which they frequently do mistakenly”.

I wonder why they are even allowed to do 1). There are entire industries (like airlines, for example) which rely on negative working capital to operate at all.

The only one of the examples you listed that makes me even remotely sympathetic to Paypal is TOS violations but Paypal or any big company's TOS is sufficiently vague to make any suspension justifiable as a TOS violation.

Those dastardly people successful at selling their products and services at scale.

PayPal isn't a bank. It doesn't have depositors, just plain creditors. (Oversimplifying.) It should have to disclose this more thoroughly. But there is a legitimate niche for low-compliance deposit-like instruments in our financial system.

Isn't paypal a bank in europe and is supervised by CSSF due to having a banking license?

Yes, they are regulated as a financial services provider

They do. I got my account locked below I had opened it when I was below 18 and they allowed me to withdraw the thousands I had on without any problem, from the moment it was locked.

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