May 30

How You Can Get Banned From PayPal

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PayPal has very strict measures in place for their accounts. What I didn’t know until it happened to me is that you can quickly get kicked off of PayPal if you violate policies, and if you do, it’s for life, with no chance of parole. Here are some things to know about why you can get kicked out, and how to avoid getting banned from PayPal.

I was a victim of circumstances.

I was just testing things out. It was an honest mistake.

I had a website set up with a module set up from LearnDash to try to sell some courses I was working on. Part of the setup with SamCart is the ability to accept payments. I set it up for Stripe to accept MasterCard/Visa payments and then created a separate business account on PayPal with a different email and bank account.

But I wanted to test it out. I was just testing.

I went to my website as a visitor and purchased the course with my “civilian” PayPal account. It processed the payment. I looked at my bank account and saw the money had come out of the account that my personal PayPal is hooked up to.

After that, I clicked the link to go back to the web site. It complained about something but I said “go back” anyway. I went to log into the course. It said I had to pay to sign up.

:-/

So, since my money was locked up in the business PayPal account and I thought I didn’t want to lock up a lot of money, I changed the price of the course to one dollar, and then tried it again. Same result. Paypal took my money and yet I wasn’t enrolled in the course.

And then, I went to my business PayPal account page and it said, basically, “you’re banned for life. Do not pass go. Go directly to jail.”

I thought it was a joke. But it’s no joke now.

I didn’t understand what was going on. I clicked on “details.”

Just because you’re honest, it doesn’t mean everyone else is.

I had no idea what I did. It was only after I dug into this a bit by asking in support groups that this is probably the biggest no-no you can do with PayPal.

The reason? It never occurred to me. But it seems this is a wonderful tool with potential to do a little money laundering. I guess I’d have to think about that a while to even understand how it would work.

But then, it’s probably not worth my time to try to do that. I’m not that kind of guy.

Now, apparently, they make a tool for testing which is what I should have used. It’s called “PayPal Sandbox.” and it is specifically for testing with your setup to make sure it works without doing anything that looks like laundering.

Learn to play in the sandbox.

PayPal Sandbox” is specifically for testing with your setup to make sure it works without doing anything that looks like laundering.

There are lots of interesting things in the PayPal agreement.

For instance, you can get the boot from them if you offer PayPal as a method of payment alongside Visa/Mastercard through Stripe, and then make some reference to the fact that you’d prefer they use Visa/Mastercard over PayPal!! It is in the user agreement.

In representations to your customers or in public communications, you must not mischaracterize any PayPal service as a payment method or exhibit a preference for other payment methods over any PayPal service. Within all of your points of sale, you agree not to try to dissuade or inhibit your customers from using PayPal or encourage the customer to use an alternate payment method. If you enable your customers to pay you with PayPal, whenever you display or exhibit the payment methods that you accept (either within any point of sale or in your marketing materials, advertising and other customer communications) you agree to display the PayPal services payment marks at least as prominently, and in at least as positive a manner, as you do for all other payment methods.

PayPal User Agreement

What looks like it might be what I did wrong was in the “user agreement” under the “restricted activities” section:

In connection with your use of our websites, your PayPal account, the PayPal services, or in the course of your interactions with PayPal, other PayPal customers, or third parties, you will not:

  • Send or receive what we reasonably believe to be potentially fraudulent funds.
  • Attempt to double dip during the course of a dispute by receiving or attempting to receive funds from both PayPal and the seller, bank or card issuer for the same transaction.
  • Control an account that is linked to another account that has engaged in any of these restricted activities.
  • Conduct your business or use the PayPal services in a manner that results in or may result in 
    • Provide yourself a cash advance from your credit card (or help others to do so).
    • Use the PayPal services to test credit card behaviors.

I can see, now, how it might look like money laundering. Or something like it. But unfortunately, I don’t know how I could have seen that coming.

So I’m going to try to figure out how to play in the sandbox. Check out this tutorial, below.


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