[Cederfjard]

What legal justification does PayPal use for keeping people’s money when they shut down their accounts? Even if the funds were obtained in some illegal way, they are still surely not PayPal’s. Banks can’t decide unilaterally to just keep someone’s money.

[jhugo]

They recover their "reasonable costs" from your money, after you agreed to them doing that when you decided to use their service. I've refused to use PayPal as either a buyer or seller for years now; anyone still doing so honestly can't act surprised when something like this happens.

[YeBanKo]

What is the alternative?

[TomSwirly]

Why do they need a legal justification, practically?

They take the money, and there is nothing you can do. If you spend enough money on lawyers, eventually they would give you the money back, but you'd lose on that deal too.

Ethically and morally it's abhorrent, it degrades the power of the law, but they can get away with it. Fuckers.