Ask LH: Can PayPal Block Me For Too Many Disputes?

Hi Lifehacker, I have been using PayPal for years, but recently there has been a few refunds due to quality of items and also that wrong items were sent to me. PayPal has buyer protection where we can lodge disputes and escalate to claims if problems arise with our purchase. However, PayPal recently has disabled my account saying I have too many disputes and claims. They also said that this cannot be appealed. Can PayPal do this? What can I do about it? Thanks, PayProblem

Dear PP,

A perusal of PayPal's User Agreement — which you agreed to when you initially signed up — includes the below caveat:

PayPal, in its sole discretion, reserves the right to terminate this Agreement, access to its website, or access to the PayPal Services for any reason and at any time upon notice to you and payment to you of any unrestricted funds held in your Balance.

The document goes on to give a "non-exhaustive" list of reasons your account may be blocked, including:

multiple disputes received regarding non-despatch of merchandise, non-delivery of services, merchandise not as described or problems with merchandise shipped may result in action being taken by PayPal.

PayPal has covered its tracks pretty conclusively here — but that doesn't necessarily mean that your case is hopeless. If you feel like you're being unfairly vicitimised, contact the Australian Competition & Consumer Commission (ACCC). Although the ACCC doesn't resolve individual disputes, it may help to get your case escalated to the highest priority level over at PayPal. Having the ACCC sniffing around is never a good look for a company.

You could also try lodging a dispute with the Financial Ombudsman Service (FOS). The FOS is a not-for-profit external dispute resolution scheme that provides free services to consumers who are unable to resolve disputes with financial services providers.

Alternatively, there's probably nothing stopping you from re-registering with a different email address and payment source — not an ideal workaround but better than nothing. If you'd prefer to wash your hands of PayPal, most sites do accept other payment methods.

In future, we'd recommend being more selective with the vendors and customers you buy from and making sure you've tried everything possible to resolve the issue before making an official complaint. Also, make sure to thoroughly read the T&Cs before signing up to any online service; it sounds like obvious advice, but hardly anyone does it.

Cheers Lifehacker

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    You might find some stuff here about how to deal with this sort of thing through paypal:

    If your doing this through Ebay, I normally try to resolve it via Ebay within 30 days before escalating to Paypal. If you haven't escalated it to Paypal by 30 days your not covered by the buyer protection. I find most people are easy to deal with prior to going down that track.
    If I've needed to escalate I tend to explain why RE the 30 cover rule (usually it's an OS item being posted forwards and backwards and tends to go past the 30 day point, hence escalation).
    This may help reduce the number of disputes & claims raised through Paypal going by the 30 day rule.

    On a sellers side, nothing I hate more than when someone lodges a PayPal dispute without even contacting me to say they have an issue. Wastes my time and everyone else's.

    PayPal offer a service that they developed and own. They can do with it as they please as long as they comply with the local regulations in their industry in the countries they trade in. Hate to tell you, no privately owned store or service is obligated to serve you.

    Let's face it. He was probably lax with his business practices and paid the price.

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