Reasons for Account Closure
In the user agreement, PayPal states the company's right to close a user's account if she engages in restricted activities.
Activities such as selling counterfeit items, reaching a negative account balance, or providing false or inaccurate information are only a few restricted activities that are grounds for account closure.
If you remove consent to receive electronic communications, such as removing your email address from your contact information, PayPal also reserves the right to close your account.
If you fail to log in to your PayPal account for at least two years, the company will close your account.
If there is a balance at the time of closure, PayPal will send the balance to your primary residence or revert the balance to your state of residency.
If your address or registered state is unavailable, PayPal reverts the funds to Delaware.
You will receive a notice prior to the account closure and reverting of the balance.
Contact your state's unclaimed property administrator to claim the balance if PayPal reverted the funds to the state.
Recovering Closed Account Balance
If PayPal closes your account due to restricted activities violations and your account contains a balance at the time of closure, PayPal may hold the balance for 180 days.
If there are any fines or liabilities associated with your account closure, PayPal will deduct those fees directly from any existing balance.
If you are unable to recover your funds after 180 days, you may have to file a suit in small claims court to receive the remaining account balance.
Once PayPal closes your account, there isn't much you can do to reopen that account.
However, unless PayPal indicates a refusal to services in the future, you can open another PayPal account, but it will not include your previous transaction history.
You must register the new account using different login information, and you can't use financial accounts linked to your previous PayPal account.
You must link a new bank account or credit card to the new account than those linked to your closed account.