We are a small, British-registered charity enabling medical students to pursue elective studies in Cuba. A few supporters make small donations to us through PayPal. Last November, PayPal abruptly froze our account and demanded further information, including copies of our bank statements and my passport. With considerable reluctance we provided this sensitive information and PayPal reopened the account. I immediately withdrew the £80.03 which was in the account.
Wisely, I congratulated myself, because in December they again froze the account, demanding the same information and making the following assertion: "We noticed activity on your PayPal account that may be associated with the purchase or sale of goods prohibited by regulation."
We neither purchase, nor sell, goods and have no idea what regulation they are referring to – unless, perhaps, it is the American embargo on trade with Cuba. I pointed out that American law does not apply in Britain, and, in any case, we do not trade with Cuba.
In January, our account was frozen once again, then restored, and I discovered my earlier withdrawal had not been completed. Now our account has been frozen a third time. CA, London
PayPal took a long time to investigate this before eventually informing us that your account is indeed being closed because of your (indirect) links with Cuba. A spokesman said that because PayPal is a US company, it is bound by the embargo against Cuba: "We will be explaining this to the account holder, and refunding the money. We also apologise that we didn't make this clear at a much earlier stage." It is strange that PayPal (Europe), which is regulated as a bank by Luxembourg's Commission de Surveillance du Secteur Financier (CSSF), has to bow to its California-based parent company.
A few years ago, Money highlighted a similar issue for holidaymakers surprised to find their credit cards were being turned down in Cuba – because the card issuer was ultimately owned by an American company. We may be consumer champions here at Money, but our influence, sadly, does not extend to the White House.
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