I had the same thing happen to my account. There was a very rapid change in my selling amount and nature of what what was being sold.It still took them about 10 days to limit, and then finally after about 3 weeks to finally fully restrict my account.
Assessed risk is paypal's middle name. Though they are not a bank, they operate under many of the same guiding federal laws that banks do as they function so similar to a bank and lending institution that they must. Hence the same credit pulling use to determine risk that a bank or credit card uses. The more they are obligated by law to operate like a bank, the more likely they will behave like one. The largest risk to them is fraud like all banking institutions. After that from a federal stand point is money laundering...from any source for any purpose. Now that said, I'm in no way implying that anything you have done falls into these categories, I just wanted to lay the ground work for what paypal, because they are not a bank, can get away with doing, which is to hold those funds for very long periods of time. Banks cannot do this with out a sopena to do so (shy of course based on "funds availabilty" what is generally a 10 day limit). Back to Assessed risk. All financial institutions are allowed to determine this in what ever fashion they deem appropriate, though most subscribe to "best practices" of other financial institutions. This way they have a collective source for determining what they do, so if their practices come into question, they easily can show that they do things the same way as everyone else.(hence the red portion of your OP that very much resembles what many banking instutions are using that even includes credit scores now) Their ability to categorize under the heading of "Risk" is so broad and vauge that really they can use any reasoning they want, and not really have to so much proof of this, literally even down to someone having 1 extra withdrawl in a month or an extra $100 come into an account...etc. And then to boot, federal law makes it so you have to appeal to the credit bureau that the info is obtained from and not the financial institution you are dealing with. Ultimately for the moment your money is stuck.
However, eventually this money must be given back to you. Howoever and the however is the important part. They have the right as their terms of service state, to hold your funds for a period of time. Barring chargebacks, buyer issues and refunds to them etc. anything still in the account at the end of the period they hold it for should be returned. That said they can and likely will ask for identifing info etc to prove the money is legitamately yours, whether from an account in your name or stealth, either way I would expect to have to provide them with any information they ask for in order to have your funds released. In my case I was able to recover my funds, but not until I did EVERYTHING they asked me to do. This involved serveral phone calls to the same investigator at paypal, and tons and tons of document faxing, reciepts etc. At the end of the day, I also had a rolling reserve that I will not get until my period of time with it has elasped. Ultimately the rep. I delt with at paypal had an ability to use a certain amount of their descretion as well as their own negotiating skills with me. At first it was going to take me 180 days to get anything, but by the time it was all said and done he released about 1/2 immidiately and the rest is awaiting the final rolling reserve date and then the entire other half will be released.
Anyway, I wish you the best with this and hope that things work out!
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