PayPal Disrupting My Business with Limited Account, Transaction Holds

All of the horror stories are coming true, after over a decade of using PP.

[physics]

Recently I experienced some of the dreaded slaps by PayPal. They limited my account for over two weeks, disrupting my business, based on a simple purchase that I made. Neither I, nor the seller, disputed anything having to do with this transaction yet PP decided, in their great wisdom, to review it. All of my entreaties lead to only 'canned replies' by PayPal, if anything.
Then, after the account was mysteriously restored (not sure why).
I thought it was all over.
Yet a couple of days ago a recurring payment went through that actually should have been canceled. I contacted that company and asked that they please refund the money. They immediately said OK and put the refund through. PayPal, however, decided to put a temporary hold on that transaction.

For years I've been hearing fellow Webmasters say to watch out for PayPal but I never got 'slapped' myself (despite HEAVY usage of PayPal).

Some tips if you use PayPal for your business:

Have a separate account for personal purchases or purchases that you worry may trigger a review.

Make sure your phone number is up to date.

Anything else?

[dpd1]

Did you call and ask them what's up? You can't do email... The people that handle the email are complete morons. I would just demand to speak to the highest level person you can. You have to be firm... Explain to them that they have made a considerable amount of money from you, and not being able to give an explanation as to why these things happened, is unacceptable. I had a couple snafus happen recently myself. Though 99.9 of my dealings with them have been fine, I know the occasional strange thing is disturbing. I think that basically what's happening, is that the system just screws up, and they honestly don't really know why it tells them to do something. But I got pretty firm with them over the phone and demanded an explanation... They put me onto another guy who seemed to be at least semi in the know. I never did get a 100% explanation, but I got the idea across that I was very displeased and didn't want to see it happen again. Knock on wood, so far so good.

[brokaddr]

physics, did you recently upgrade your account to include the Virtual Terminal or WPP?

I experienced a similar situation when I upgraded to Website Payments Pro. I now have a rolling reserve after nearly 10 years of working with PayPal and they have explicitly stated it's due to my WPP application. If I want to remove the account restrictions, I have to downgrade to Website Payments Standard.

Additionally, a while back, my PayPal manager mentioned they (PayPal) are going through accounts at random and reviewing them for risk. If you fall under a "risk" category, you get the same treatment the newbie accounts do; irregardless if you're using standard PayPal or the Virtual Terminal / WPP.

[physics]

brokaddr, nope. No big changes recently at all.

[jwolthuis]

Was the refund from the mistaken recurring payment put on hold on your end, or theirs? In other words, their refund cleared on their side, but was "put on temporary hold" only on your side?

Is it possible that the refund issue isn't related to the earlier purchase that you made?

[trinorthlighting]

It happened to my company and we are fairly large. My advice, get a merchant account. You will not only find better service but also lower rates.