PayPal's decision to cut off
the account of an organization that was collecting funds to help with Bradley Manning's defense got a lot of attention -- so much that PayPal came out with a blog post explaining that it was just a paperwork problem
on the part of the organization, Courage to Resist. Because of this, they've reinstated the account:
We recently placed a temporary limitation of the Courage to Resist organization’s PayPal account as they had not complied to our stated policy requiring non profits to associate a bank account with their PayPal account (for the vast majority of non-profits, this is not an issue).
In a press release issued today, the Courage to Resist organization claimed that their resistance to follow our policy is because PayPal sought to withdraw funds from their checking account. To be clear: PayPal cannot take such action without the authorization of an account holder, nor does it ever take such unauthorized actions.
Upon review, and as part of our normal business procedures, we have decided to lift the temporary restriction placed on their account because we have sufficient information to meet our statutory 'Know Your Customer' obligations. The Courage to Resist PayPal account is now fully operational.
While it's good that they've done this, not all of this makes sense. Courage to Resist claims that they repeatedly asked for an explanation and for the specific policy that they had violated. If it was just a matter of associating an account with a bank account, why didn't PayPal just tell them that in the first place?