How EU Regulations Limit Access to your Paypal Account

PayPal emailed me today that they are required to limit access to my PayPal verified account if I don’t confirm my account information. EU regulations require PayPal to collect some of their customers’ information, so that they provide a safer platform and help prevent illegal use of its services, such as money laundering fraud. Since my account was already verified, my online research came up with stories about closed PayPal accounts, inaccessible PayPal money and PayPal fraud. In the end it all comes down to answering a multiple choice question whether you are an individual customer, a sole proprietor or some kind of business. Most say that upon answering that question, you’ll be asked to provide identity proof, utility bill as a proof of residence address and link your PayPal account with a bank account and a credit card. I wouldn’t know as I have already done all that back in 2008 when I upgraded my PayPal Personal account to a Premier account.

The timeline of complying with EU regulations and verifying my PayPal information began by receiving the email by PayPal, letting me know that I must complete the account update by 27^th of February 2012. After making sure it wasn’t a phishing email that needed to be forwarded to PayPal security email address for possible PayPal fraud, I logged in to my PayPal verified account.

To my surprise no message popped up and I was using PayPal just like every other day. Still I wasn’t relaxed and started looking around and doing my favorite research online. It turns out many PayPal users had received the same email about EU regulations during the last 2 years, but almost all of them ended up providing the necessary documents as a proof of their personal information, something they hadn’t done to start with. That was not my case. Most had been contacted due to reaching the transaction limit of 1,900 British pounds, or the USD2,500 equivalent. I had long passed that transaction limit but I still read some messages. The answer to their problem was to provide one of the missed documents or link a bank account or credit card, easy as that. Of course the posters were mostly worried whether PayPal was safe to use. “Is PayPal safe” was the most common question I came across, followed by “I’m leaving PayPal after X years”. There were also 2 horrifying stories, according to which the PayPal account holders had limited access to their funds for 180 or 270 days before they could withdraw the PayPal money. They weren’t allowed to do business with PayPal anymore and the withdrawal was the only option to them, but not before 6 or 9 months had lapsed!

A couple of webmasters, freelancers and entrepreneurs kept asking what would happen when they clicked “continue” or “proceed”. Yet, I wasn’t able to find that message. I thought of giving another try and while keeping an open tab after my successful login to PayPal, I re-logged in with another browser. I had just read that I had to access the “Resolution Center” from the top menu to complete the verification, when I landed on the following message right after my second login. “Need information to comply with EU regulations” and other stuff is written on that PayPal message, but there’s a significant difference between that message and the original PayPal email I received. The dates didn’t match!

So I clicked “Update now” and I would decide later whether I would complete the questionnaire or not. Notice the photo of the elegant chick next to the message, trying to persuade you it’s the right thing to do!

And here we are! Confirming my PayPal account information was answering a simple yet complicated question. Was I an individual customer, a sole proprietor or a business? Off to my online research I was. Results aligned towards choosing the individual customer, unless you had registered some kind of business at your country of residence. As that is not the case, I moved on and expected the following message to prompt me sending some photo ID, proof of address or another credit card, although I found it very strange to send the same documents I did a couple of years ago. Clicking the “continue” button had the following result.

I believe this is the time when other PayPal account holders get the message of sending necessary documents to verify their personal information according to EU regulations. Having done that, I could once again access my PayPal account’s funds. Had I lost access to that at any point? No. Even during following the steps, I constantly checked my PayPal account via the first tab where I had logged into my PayPal account before dealing with the messages. It seems even if you click “proceed”, “continue” or “update now” you always can revert back and complete the verification steps at another time but before the deadline. You can even repeat the process! However, some PayPal customers complained that they lost access to their money until they provided the aforementioned documents. Have that in mind, in case you haven’t sent any of those, and quite possibly haven’t got a PayPal verified account for yourself.