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$2,500 PayPal fine for breaking PayPal Acceptable Use Policy

By Chris Dawson April 8, 2020 - 6:25 pm

PayPal have published updates to the PayPal User Agreement which will come into effect on the 16th of June 2020. The most surprising change is PayPal commercial users will have to agree to a $2,500 PayPal fine if they break the PayPal acceptable use policy, in addition to any other limitations or holds on their account.

Actions We May Take if You Engage in Any Restricted Activities
If you use your PayPal account primarily for the purposes of your trade, business, craft or profession and you violate the Acceptable Use Policy, then:

  • in addition to being subject to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by your violation of the Acceptable Use Policy;
  • you acknowledge and agree that USD 2,500.00 (or the prevailing equivalent in the currency of the country in which you reside) per violation of the Acceptable Use Policy is:
    • a reasonable minimum estimate of PayPal’s actual damages considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated;
    • reasonable and proportionate in its application to the provision of the Services to you; and
    • necessary, but no more than sufficient, to protect PayPal’s legitimate interest in your compliance with the Acceptable Use Policy; and
    • PayPal may deduct such damages directly from any existing balance in any PayPal account you control.”


– PayPal

The PayPal Acceptable Use Policy isn’t that restrictive for most ecommerce merchants. It bans you from breaking the law, selling drugs, cigarettes, obscene items, fire arms, knives etc and also prohibits using your PayPal account from the likes of pyramid schemes and dodgy banking practices. There are also some products and services such as airline tickets, gambling, file sharing and selling certain products such as alcohol or non-prescription drugs that you need to get advance permission to sell. Now, break any of these restrictions and as well as the normal limitations PayPal may impose, a $2,500 PayPal fine could be deducted from any PayPal account that you control.

You can read the full PayPal updates here.

  • Steven
    8 months ago

    PayPal areout of control.

    So not only can they freeze your account for any spurious reason now they can steal £2K from you as well.

    They need challenging in court or by government.

    • james
      8 months ago

      i think they’re going to find their day in court if they ever try to exercise that fine.

      their acceptable use policy is full of language like
      you cannot use paypal for…
      “CERTAIN multi-level-marketing campagins”
      “for the sale of CERTAIN items….”
      “CERTAIN sexually-oriented items”
      with no definiton or description of what makes “certain” ones unsuitable, whilst others aren’t. we’ll fine you when we feel like it, seems to be the jist.

      also “items which… facilitate others to commit a crime”,
      so £2k fine for balaclava sellers then? i don’t think that’s gonna stick.

  • Jonah
    8 months ago

    Good old PayPal acting as police, judge trial and jury. On who’s arbitrary say so PayPal? Which specific items and cases? What’s the criteria? Who’s making the judgments and who do appeals go to? You think we are just going to roll over and pay you £2k.
    Trot on, this must be a late April fools joke 🤣

  • Alan
    8 months ago

    Fortunately I now have few reasons to have a Paypal business account – their “carrot” to keep me has mostly gone. And now they have produced a “stick” to beat me away.

  • Melinda
    8 months ago

    The $2,500 fee was put into place last year in the US, this is not a new policy. The people who were hit with it weren’t even told what transactions violated the policy; their accounts were simply locked and all of the money seized.

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