Moneywise helps a reader whose PayPal account was shut without explanation
In September, PayPal closed my account, which I had been using for about 10 years. The reason given was “activity that contravenes our terms and conditions”.
Three days before it was closed, I received a message from PayPal advising me that I was within a few hundred pounds of the amount that its terms and conditions allowed to pass through my account in one year. It suggested I upgrade to a business account so that I could continue using their facility with a higher limit. This struck me as very convenient and I sent them a valid passport and a utility bill proving that I resided at the address listed on my account.
After submitting my ID evidence, I received an email saying that I could no longer use my PayPal account. No reason was given for this. I have not been involved in any fraudulent or dishonest activity.
This does seem to happen all too often and I’ve written several times in the past about people who have had their account shut with no explanation and no access to their cash for months. The good news is that when I intervened on your behalf, PayPal responded quickly and positively. The problem turned out to be your proof-of-identity photograph, although goodness knows why the company couldn’t have sorted it out earlier.
Here is PayPal’s explanation: “EU anti-money laundering and ‘Know Your Customer’ regulations require that we verify the identity of our customers before they send, receive or withdraw receive €2,500 (or the equivalent in other currencies) through their PayPal account. To remove these limits and to comply with EU law, we will ask a customer to provide more information about themselves before they reach this amount. These are very important regulations intended to prevent criminals and terrorists from using financial products or services to store and move their money.
“TS’s account was approaching this threshold in September 2018. As a result, we asked him to provide the necessary proof of identity, which he did in the form of a scan of his passport and proof of address.
“Unfortunately, the passport scan was not of a high enough quality for us to use it to confirm proof of identity and, as a result, we placed limitations on his account. For the purposes of verification under anti-money laundering regulations, we cannot release funds without a valid proof of identity.
“We have reviewed the account and the information provided and have now been able to verify the account. TS can once again send and receive money through his PayPal account. We are sorry that we did not respond to his concerns earlier.”
PayPal offered you a £50 goodwill payment, which you asked to be donated to my chosen charity, the Indonesia Tsunami Appeal.