Way back in 2011 they did this to me. My marketing agency had been running most of our customer payments through PayPal for several months, and we were growing fast. At some point they took the $50K we had in the account and froze it for 180 days with no recourse, claiming it was to protect against charge backs (despite us never having a single chargeback).
I explained to them that if they didn't release the funds they would most certainly have charge backs because we'd be out of business and thus unable to deliver on the work promised for the money.
Nothing we said did any good. That is until I looked up the laws in Washington State about money transmitters. Turns out based on the specific license they had in Washington State at the time, it was illegal for them to hold funds for longer than 7 days.
Me telling them this did nothing at all, but when I sent a letter to my state governor explaining my predicament and someone from that office sent a letter to the folks at PayPal, suddenly my funds were released and a note was placed on my account to never withhold funds on that account ever again. Been smooth sailing ever since :-D
I explained to them that if they didn't release the funds they would most certainly have charge backs because we'd be out of business and thus unable to deliver on the work promised for the money.
Nothing we said did any good. That is until I looked up the laws in Washington State about money transmitters. Turns out based on the specific license they had in Washington State at the time, it was illegal for them to hold funds for longer than 7 days.
Me telling them this did nothing at all, but when I sent a letter to my state governor explaining my predicament and someone from that office sent a letter to the folks at PayPal, suddenly my funds were released and a note was placed on my account to never withhold funds on that account ever again. Been smooth sailing ever since :-D