Posted by Chuck on April 7, 2017
Misc

Published on April 7th, 2017 | by Chuck

63

Getting Shut Down by Paypal, Venmo, and Square

Here are my Paypal, Venmo, and Square Cash shut down stories.

Paypal (x 3)

My first two Paypal accounts (personal and business) were shut down due to a few factors: lots of high-volume transactions, Paypal MyCash cards, postal money order purchases with the PPBDC, etc. You get the picture.

I tried calling in to get it reinstated, but it was like talking to a brick wall. “We recommend you take your business elsewhere.”

Since then, I opened a new Paypal account, and life went on better than expected. 

Almost two years later, a friend sent me some money with the ghastly letters “GC” used to describe the payment. That triggered a freeze on the payment (around $2k). They wanted me to wait six months for the funds. I CFPBed them and they unfroze the funds, but shut down the account.

On to the next Paypal account.

[Read: The Various Levels of Paypal Accounts]

Venmo

It took me a while to get used to Venmo’s social-based platform, but after a few short months I loved it. I used to marvel how Paypal always make problems, yet Paypal-owned Venmo worked smoothly and quickly.

They have clear limits of $3k/week ($300/wk without verification), and everything went smoothly and easily. Presumably, I just have to stay within their stated limits and all will go well, right?

Until…I was shut down.

Screen Shot 2017-04-06 at 11.21.11 PM

I mildly tried getting them to reinstate the account, but they resisted, recommending that I get a Paypal business account instead. If only they knew…

Square

So this one was interesting, and luckily it has a happy ending.

I initially opened a Square Cash account to send money to a friend. Remember, my Venmo and Paypal were gone, leaving me with Square to send money to friends. Square has similar limits to Venmo, though I used it very casually for a few friendly transactions.

A few months later, Square Cash began offering a $10 bonus when signing up using a referral link. Our beloved leader Will posted about that deal, and generously included my signup link in the post. (I’ve gotten quite a few referral bonuses from that, thanks to all who used it!)

Soon after the DoC post went live and a few referral bonuses rolled in, I found my Square Cash account frozen. I knew right away that it had to do with the influx of referrals, but I completely mistook the underlying concern.

My assumption was that Square presumed the referrals fraudulent; perhaps I created a bot that opened Square accounts to game the referral system, or something of that sort. I contacted Square to clarify that all the referrals are legit and coming from the blogpost.

Interestingly, my email could have done more harm than good because they explained that the reason they froze my account was that they don’t allow accounts which are in existence solely for the sake of generating referrals.

In any case, my Square account had in fact been opened for the purpose of sending money between friends. It was around for a few months before any referral action, and from the account activity it was also clear that I’d been using it to send money to friends, something I continue to do now.

After a couple emails exchanged, they unfroze my account. I think I lost out on a few referral bonuses during the time the account was frozen, but now the account is back to normal for sending money and referral bonuses.

Wrap Up

So there you have have my electronic wallet war stories. On Sunday we’ll do a follow-up post entitled: How to Send Large Payments without Getting Shut Down.



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george
george

I don’t even know why Paypal/Ebay are so trigger happy when they’re making money off it anyways

Vash
Vash

I agree.
I talked to a paypal rep once on the phone. I was having issues linking my paypal and my bank account. The rep encouraged me to use PPMC. She told me they perfer PPMC over ACH transfer from banks.

Mark
Mark

Seriously? I mean obviously Paypal are off the mark 90% of the time, but surely you can see the reasoning behind what they do. Facilitating potential money laundering is not a good look with regulators.

bob
bob

If it’s a stolen credit card they will eat the loss. They don’t want to eat the loss.

Hanna Johnson
Hanna Johnson

What is the problem with “GC” exactly? Something about gift cards?

Miro
Miro

Dont ever send money for transactions with the wording gc or gift cards using the friends/family button.Even if its between friends/family, you will get hell from shity paypal, since they get no cut.

Eric
Eric

Why does PayPal/Venmo/etc. offer these debit transactions with no fees? What is their benefit?

bob
bob

To make it a habit for you to use their product

Harry
Harry

I have used Paypal for long time doing mostly buying PPDG GCs (several issues wih that in the past, but those are same as what everyone else would have faced) and some small selling on ebay as well as other non-ebay friend transactions and receiving cashback etc. Recently I added a business credit card to my list of CC on Paypal. Unrelated and soon after a friend sent me about $150 without any message and that caused the freeze. When I called in, I was asked what is the nature of my business, what kind of items I sell, etc. After some explanation (I am not a business) they were ok with and unfroze my account. So either one of two actions or a combination of the two triggered the freeze in my case which was adding a business credit card to Paypal or getting a small friend and family payment.

internet
internet

Hi Chuck – Can you give any further details on your Venmo usage that preceded the shutdown? Amounts, frequency, number of other people involved, age of account, etc? Any info would be greatly appreciated. Thanks!

MM
MM

I mean, you ain’t no Vinh, but some helpful shutdown stories nonetheless. Thanks, Chuck!

Max
Max

Fuck that guy. He uses Twitter to brag about ill-gotten gains and then responds to polite criticism like Trump. Logical fallacies, name-calling, and a shitty company built by the Great God Luck.

AB
AB

+1

Stopped reading him after he attacked me for asking a question about a post on MSing with Hilton Surpass vs. AMEX GCs. I just asked why not use the Surpass to buy the GC and his head exploded.

Ron
Ron

Any DP about using square cash to meet min spend?

Jeremey
Jeremey

A venmo shutdown scares me. Not sure how i would MS sign up bonus’s without venmo at this stage of my life.

Steve
Steve

I’m a little unclear what makes Venmo a good MS solution. Isn’t 3% a bit much to pay for CC payments? I get it as a way to liquidate gift cards.

clay
clay

steve, you can load gift cards into venmo and pay friends. There’s just a limit to a certain amount of cards every 6 months.

Mark
Mark

3% fee to load gc? That Is too much.

Steve
Steve

I so understand this, but my question was about how this is a good MS solution at 3% on credit cards. I can only imagine using this when you’re desperate to make the min spend.

Eric
Eric

Are you talking about Metabank gc?

LC
LC

For sign up bonuses its been an easy profit for me. I do not have rent/mortgage other similar payments so I can’t reliably use plastiq at 2.5% at this point in time. I do not unload gift cards on venmo, its how my brother got banned.

Steve
Steve

“For sign up bonuses its been an easy profit for me.” – I can imagine it being an easy profit, but I’m wondering if it’s a good profit. If paying 3% on $3000 on a CC costs $90 to net a standard 50,000 mile or point bonus, this sounds kinda bad.

LC
LC

I mean if I can sign up for a bank bonus or have natural spend, I mix it in there when possible. Otherwise i have no way to meet the full amount and use venmo for the rest. Pretty sure this game has many strategies and none of them are always 100% profit, including MO. Theres a time opportunity cost as well. This works for me and may not be for everyone.

Wong
Wong

You can fund bank accounts. You can MS 10 accounts for at least $20,000 a year. Quorum is $2500, PNC lets you open 3 or 4 accounts with $2000 via visa/mastercard.

LC
LC

I do this when I can but its also usually state specific. Also I tried Quorum and got denied.

Wong
Wong

You can use goldmoney to buy gold and withdraw to a bank. The CC fees are about 2.9% total. Redemption is another 0.5%

Eric
Eric

Do you mean your bank charges a .5% fee to deposit gold as cash?

Eric
Eric

Don’t you run into trouble with bank accounts you actually want (ie for sign up bonuses) due to all of these wasted Chex inquiries? Do the banks ever get mad when they realize you only used them for the credit card funding?

Do you know of any banks that allow Amex for credit card funding for large amounts?

Wong
Wong

I just started opening accounts from march to now. I have 3 bank account bonuses open so far. From what I understand, the big banks are less likely to care about how many accounts you have.

Eric
Eric

I would guess that at least half of the bonuses I have done are for smaller banks. From data points it seems like a lot of them are more conscious of Chex inquires.

Have you been doing the M&T promos? I’m a little nervous that each time I open an account there it is another Chex inquiry which will look quite bad when I try to open accounts at other banks.

Eric
Eric

Are you the same person as LC or do you just use the same Gravatar? I’m just curious, who is that in the Gravatar?

Wong
Wong
Eric
Eric

Thanks. I actually asked Jeremey if he was the same person as LC before seeing that LC commented further down the page (I usually read the comments in order) confirming that it is the same person. I guess he uses different identities.

Wong
Wong

If you dislike it, you can always block it manually with AdBlockPlus. And to your previous question about large funding with Amex, BMO Harris allows you to open up a checking/savings simultaneously for $1000 each. I didn’t try but you can probably go for a third one. Instant approval, so no hassle, but you’ll have to deal with avoiding the monthly maintenance fees.

Eric
Eric

If I dislike what?

I actually know about BMO having Amex funding but I just closed my checking account with them about a week ago so it would look a little ridiculous if I open another account that fast. Do you know of any others that preferably have bonuses attached?

AML
AML

Can we not do a post about that? Thanks in advance

Evan
Evan

So if they close your PP account, you can open a new one just like that? Do you have to wait for a certain period? How exactly does this work?

Mark
Mark

Curious about this too.

V
V

Evan,
I think this is what he is referring to:
You have a business account which gets flagged and gets shut down. Now you can open a new “personal” account which does not require you to verify your identity to the same level of detail (I think business account requires you to verify two of three things, and perhaps SSN is mandatory to verify). That means that You can setup multiple personal accounts even after the business account shut down but the personal account is severely limited. $500 withdrawal (to bank) limit per month. There is probably no overall sending limit based on a quick search, only a 10k limit per transaction.

V
V
Eric
Eric

I thought PayPal limits you to 1 personal account per person. If so, how would he “setup multiple personal accounts”?

Steve
Steve

how do you open a new paypal account if they require your ssn when you sign up?

Gerry
Gerry

Did you try Google Wallet? There are no fees and the limits are:
1. You can’t send more that $9,999.00 in a single transaction
2. Your total transactions in one week can’t exceed $50,000.00
3. If you live in Florida, you can’t send more than $3000.00 every 24 hours.

I haven’t tried Venmo… the social stuff just seems too weird for me. I’m not excited about
sharing my money transfer information.

I still have a Square account, but they now charge extra to get your money faster. Google does not – so I find myself using Google Wallet almost exclusively now.

I never used Paypal because of their fee structure. They charge 2.9% plus .30 to use a debit card. You can of course use a bank account for free, but it then takes days to get the funds transferred. Why would you use them when Square and Google provide that service for free?

The banks are coming out with a new service called Zelle this year. I haven’t seen the details of limits, but apparently the service will be free and provide instantaneous transfers.

Aks
Aks

Interesting to find opening Paypal account after shutdown?
Any such success with Serve?

Chris
Chris

Not really a data point but goes along with this thread because Venmo monitors everything very closely. A friend just showed me an email exchange with Venmo he had after paying another friend his share of a dinner out. They were in Key West and went to a Cuban restaurant. The payment was sent with the note “Cuban Grub.” Venmo froze the payment because, according to them, they are, “required to comply with the U.S. Sanctions administered by the Office of Foreign Assets Control.” The friend had to explain that he wasn’t sending a payment to Cuba and was just reimbursing his friend for the restaurant check. Venmo unfroze and sent through the payment about 45 minutes after he sent his explanation.

why1818
why1818

Happy Friday!!

CVS > Chase Freedom (5% bonus this quarter) > PayPal MyCash > PayPal Business Debit Card > Venmo > Pay babysitter

Is it too risky to get shutdown from PayPal and Venmo? Thanks!

Mark Rogerson
Mark Rogerson

Seems like creating a new account won’t work. Tried to follow the eBay incognito guide by Auction Essistance so I can use it to cash the Mycash cards, but they required and SSN and I already used mine.

Not sure what else to do since I use PayPal quite frequently.

FlyerDad
FlyerDad

Hi Chuck: I’d like to use Venmo to pay my Wells Fargo mortgage using a certain Chase credit card. For the life of me, I can’t figure out how to do it–it seems like if I simply used a credit card to fund a transfer to my own bank account (and then use that to pay the mortgage), I would get shut down, right? Lots of blogs say that you can use Venmo to pay your mortgage, but I can’t find a resource that actually says how to do it in practice. Can you (or anyone else) help? Really appreciate it.

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