[2023.8 update] A group member shared another fresh DP today from someone who was just banned. He apparently used PayPal to buy protein powder multiple times, but several orders never shipped, so he requested refunds. Now PayPal has emailed him saying it will limit his account’s transfer functions and remove PayPal purchase protection (presumably similar to a credit card’s no-questions-asked refund protection), and all current refund requests have been denied. So I think PayPal’s reason for closing accounts is definitely this protein-powder refund wave, and it is also taking action to stop people from continuing to request refunds.

Also, some users’ accounts still have not been reinstated. If you have a lot of money stuck in PayPal that you cannot withdraw or use, I suggest filing a complaint with CFPB or BBB against PayPal first and getting your money back.

[2023.6.4 update] Today I saw a very good article about how to register a new PayPal account and what to watch out for, so I’ll translate and share it with everyone. The author is miles per day, and he has already had ten PayPal accounts banned, so he should be considered experienced. First of all, having a PayPal account banned is not a big deal; you can register another one and still use it normally. Here’s what you need to prepare:

  • A new email address
  • A new phone number; if you really do not have one, you can consider a cheap prepaid number
  • A new address. You can use Google Maps to search for an address and its corresponding ZIP code. It is recommended that the ZIP code match the ZIP code on your credit card so payment is easier.
  • You can use a credit card you have used before, and your bank account probably can also be used again (though it does not necessarily need to be linked)
  • After registration, you will not be asked for SSN right away, but it may be required later for large transfers or withdrawals.
  • I recommend using the new account only for shopping. Do not receive any cashback or rebate, and do not keep money in the account. That way, in most cases, you also will not be asked for SSN.
  • If you still plan to use PayPal to receive money, I suggest using a family member’s PayPal. That way, even if the newly registered account gets banned again in the future, there is not much loss

Also, if you have money in the PayPal account that was banned and want to get it back quickly, you can file a CFPB complaint against PayPal. He succeeded with this a few years ago.

[2023.6.1 update] First, some good news: many PayPal bans in the group were automatically lifted today. There was no email notification for the reinstatement; when you logged into the account, the red text that said permanently limiting was gone. I asked around, and it seems the reinstatement had nothing to do with whether people contacted PayPal customer service. In short, if yours has not been reinstated yet, wait a little longer; it may be that customer service is lifting them in batches.

Then let’s summarize the discussions in the group over the past few days about related issues:

  • RebateKey check reversals: quite a few group members received rebates through RebateKey checks, but after depositing them they found the money had been clawed back. It is very possible that RebateKey’s bank account had issues or was restricted, causing the money to be pulled back. So if you are worried that a check reversal may trigger fees or cause problems with your bank, you may want to hold off on depositing for now. If you are charged a reversal fee, you can explain the situation to the bank and they will usually refund the money. You can also consider changing RebateKey’s payment method to a Visa gift card, since Visa gift cards generally do not have this clawback issue
  • Using the account while banned: some group members found that they could still receive refunds normally while their accounts were banned, so if you bought something with PayPal but are temporarily banned, there is no need to worry

If you want to join the discussion, you can join the group

About this account closure wave

Today there was a big piece of news in the group: many people received emails from PayPal saying their accounts had been closed, and their funds were restricted and could not be withdrawn. They also could not delete the linked checking accounts and credit cards.

At the same time, they all received emails, which can be summarized as follows:

  • Your PayPal account has been permanently limited, and the money in the account will be held for 180 days. After that, you will receive instructions on how to withdraw it.
  • If your PayPal account has a chargeback or some other reason that causes the balance to go below 0, you will also need to pay that amount, otherwise they will take action
  • If you are restricted, you may not open a new PayPal account
  • You can review the User Agreement (basically the kind of one-sided clause that says if you do not meet their terms, they have the right to close your account directly)

This is the English version of the email

After the account is closed, when you log in you will see this message

Why accounts were closed

Everyone compared their payment and receiving records and found that many people were closed because they bought free after rebate protein powder. More specifically, the accounts that got closed were those that paid Hardbody Dining (the receiving side for the protein powder). This group member only had records of paying for protein powder, but did not receive the protein powder through PayPal

In addition, another group member paid for protein powder, but the code was slightly different, Hardbody coa.., and was not banned. One possibility is that IT is monitoring transactions from Hardbody Dining.

From what I know, RebateKey protein powder had not been paying out on time for a while before this, due to cash flow problems. Then some buyers may not have received their rebates and charged back their credit cards in large numbers, causing PayPal to not receive the money, creating huge risk, and then possibly triggering this wave of account closures.

Of course, the exact reason is still not confirmed. What is certain is that there was definitely some dispute between the protein-powder recipient Hardbody and PayPal, the third-party payment platform, which led PayPal to take harsh action, first cutting off the path for everyone to do large-scale chargebacks and then holding PayPal balances while waiting for further handling.

[2023.3 update 2] Hardbody, the protein powder seller, had its Shopify account closed a while ago (about a month ago), which forced it to switch to a new store and create a new category. But it should be noted that after a Shopify account is closed, the funds will be held by Shopify officially for 120 days. In other words, Hardbody’s cash flow will be very tight recently (it is said to be a fairly large amount). If you buy a lot in the near term, there is a very high financial risk, so over the next three months (through June 2023), we will not recommend buying the protein powder, and all reminders will be temporarily suspended. We hope everyone understands.

There were also reports that the checks issued by RebateKey were reversed

What should you do

First, I still recommend contacting RebateKey and PayPal customer service to figure out roughly what happened. Personally, I think if the risk and amount are not large, PayPal may still let it slide. If your account has not yet been closed, I suggest immediately withdrawing all money in PayPal to your bank account to avoid a 180-day hold.

But everyone should note that PayPal is an old rogue; closing accounts is a classic move for them. A few years ago, people used credit cards to buy PayPal Cash, then loaded it into PayPal and withdrew it to bank accounts. Once PayPal noticed, it directly closed the accounts and held everyone’s funds for 180 days. I remember that some people also had large amounts of money trapped in PayPal, and after trying various complaint channels and eventually suing PayPal, they reached a private settlement and PayPal released the funds early. So if you have a large amount of money held in PayPal, be sure to contact PayPal as soon as possible or file complaints with BBB, small claims court, and similar channels.

Of course, if you plan to sue, you may want to find more people; ideally you could get a lawyer involved and turn it into a class action. As for whether PayPal can be reopened, my understanding before was that it could be reopened, and avoiding the original phone number, email, and address is possible, but withdrawals will be restricted until SSN is verified.

In addition, after PayPal is closed, because the cards and checking accounts inside cannot be removed, you also cannot use those accounts for another PayPal account.

We also set up a group to discuss this issue; anyone interested, or anyone affected, can join and discuss it. We also made a spreadsheet to collect everyone’s PayPal closure DPs and see whether there is a pattern