In March 2010, PayPal froze donations to Cryptome, seizing over $5300 of in-transit donations. PayPal refused to inform Cryptome of the reason for this action, claiming that to disclose why the donations had been confiscated would violate Cryptome's own privacy. A week later, PayPal offered an apology, which was rejected by Cryptome founder John Young as "insulting and unacceptable".
In September 2010, PayPal froze the account of Markus Persson, developer of independent video game Minecraft. His account contained around €600,000. [If you look at the citations for this one, he says, "They limited my account for unspecified reasons (a suspicious withdrawal or deposit! wow, thank you for that amazingly detailed information), and asked me for a bunch of vague documents. I did my best to give them what they asked for... I’ve called them three times, they keep telling me it’s being reviewed. Most recently they told me it’d take up to two more weeks for it to get resolved, and that if they decide something bad’s being going on, they’re going to keep the money."]
Also in September 2010, PayPal froze the account of the open-source revision control software TortoiseSVN. The lead developer compared the situation to a car shop that "decides not to do business with you anymore... But then the shop owner tells you that they keep your car for half a year first because that's their policy."
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In August 2002, Craig Comb and two others filed a class action against PayPal in, Craig Comb, et al. v. PayPal, Inc.. They sued, alleging illegal misappropriation of customer accounts and detailed ghastly customer service experiences. Allegations included freezing deposited funds for up to 180 days until disputes are resolved by PayPal, and forcing customers to arbitrate their disputes under the American Arbitration Association's guidelines (a costly procedure).