As would be any financial institution if you violate their rules and policies
My wife didnt violate any rules back in 2006 when she sold a small MP3 player to someone in Utah.
She decided she wanted to clean out our closets and try to make some cash by selling the unused stuff. She joined ebay and found that she HAD TO accept paypal. She listed the item, which we both tested and was in perfect condition, she listed it AS-IS and "no refunds".
Some guy won it and received it and said it didnt work. We both knew it worked flawlessly. Every part, even the small strap was provided - original box. Some accessories were still in the plastic bags they came in. She replied to the guy that it worked, etc.. and that the listing was as-is, no refunds. A couple of days later she received a dispute email from Paypal. They had frozen the amount of money from the sale, in her account. We didnt think much of it - figured she would explain that it worked, etc.. Didnt go that way. Buyer got nasty, said there were scratches, even emailed her a photo of it. It was clearly NOT the same MP3 player we sent him. He could not provide a photo of the box or the shipping box, so we dont know if it was damaged in transit. Paypal told him to return the item and he would get a refund. My wife went off the handle, and so did I. But it was at that point we both realized that we didnt photograph the serial number SO we wouldnt even know if we received the same one back. Paypal refused to take her phone calls, said everything had to be done by written or electronic mail. Eventually they refunded him and they terminated her account. She then closed her ebay account and I closed both of mine too. I was a very, very early ebay user and I was also a very very early paypal user. I wrote them a letter as to why I was closing my accounts - not that they cared.
I started looking into things and found out there was a scam going on ebay around that time where people would receive a good item and claim it was damaged or not as described and win a refund. Wish we had knew about that because we may have been cleared the moment we showed photos of the serial number. I read more than enough about paypal siding with buyers and not being fair back then. I dont know if there was a corporate problem with them at the time or not, or if they cleaned up their act since - but I dont care. I will never use them again. It was a horrible experience to basically be called criminals "running a scam operation" but have no way to exonerate ourselves.
Sorry for the long post but no, she didnt violate any rules. She was scammed by the buyer, paypal sided with them probably because her account was brand new and she was an unknown subject, and that we couldnt prove our innocence.
UPDATE: My wife just reminded me that this buyer had communicated with her prior to winning the auction, asking her questions about the player and told her he wanted to replace his broken player. So that became the red flag and when paypal told him to return our player, we told paypal that we would not be confident that we would be getting OUR player back. They took all of that back and forth discussions with them as grounds for terminating her account.
