PayPal · PayPal User Agreement

Acceptable Use Policy — Prohibited Activities and Account Liability

Medium severity
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What it is

You must agree to a long list of prohibited transaction types — violating the Acceptable Use Policy can result in immediate account termination and you being personally liable to PayPal for damages.

Change history

removed Apr 18, 2026

The removal of detailed prohibited activities list reduces transparency about which specific activities violate PayPal's policy, though general compliance requirement remains.

View full change record →

Consumer impact (what this means for users)

Using your PayPal account for any of the broad categories of prohibited activities — even unknowingly — can result in immediate account closure and personal financial liability to PayPal for damages, with the full list contained in a separate incorporated document.

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Why it matters (compliance & risk perspective)

The Acceptable Use Policy is incorporated by reference into this agreement but exists as a separate document, meaning users may not fully review all prohibited categories before agreeing to liability exposure for violations.

View original clause language
You may not use the PayPal service for activities that: violate any law, statute, ordinance, or regulation; relate to transactions involving (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) cigarettes, (d) items that encourage, promote, facilitate or instruct others to engage in illegal activity... If you use your PayPal account for these activities, in addition to PayPal immediately terminating your account, you may be liable to PayPal for the amount of PayPal's damages caused by your use of the PayPal service for these activities.

Institutional analysis (Compliance & legal intelligence)

(1) REGULATORY FRAMEWORK: The Acceptable Use Policy's prohibited activities list engages the Bank Secrecy Act (31 U.S.C. § 5311 et seq.) and FinCEN AML/KYC requirements, OFAC sanctions regulations (31 CFR Chapter V), the Wire Act (18 U.S.C. § 1084) for gambling transactions, and the Unlawful Internet Gambling Enforcement Act (31 U.S.C. § 5361 et seq.). The FTC Act Section 5 governs whether the incorporation by reference of the AUP adequately discloses liability exposure. (2)

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Regulatory citations, enforcement risk, and due diligence action items.

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Applicable agencies

  • FTC
    The FTC has authority over unfair or deceptive practices in the disclosure of material contract terms incorporated by reference, including the adequacy of notice for liability-creating prohibited activity clauses.
    File a complaint →
  • CFPB
    The CFPB has supervisory authority over PayPal's payment processing practices and handles complaints about account terminations related to AUP enforcement.
    File a complaint →

Applicable regulations

CFAA
United States Federal
DMCA
United States Federal
DSA
European Union

Provision details

Document information
Document
PayPal User Agreement
Entity
PayPal
Document last updated
March 24, 2026
Tracking information
First tracked
March 6, 2026
Last verified
April 9, 2026
Record ID
CA-P-002582
Document ID
CA-D-00044
Evidence Provenance
Source URL
Wayback Machine
SHA-256
787aedff80f89f2d9da4fd79756bbd226f8a5338c9e19c15b2a2fa0d01f59a90
Verified
✓ Snapshot stored   ✓ Change verified
How to Cite
ConductAtlas Policy Archive
Entity: PayPal | Document: PayPal User Agreement | Record: CA-P-002582
Captured: 2026-03-06 20:26:28 UTC | SHA-256: 787aedff80f89f2d…
URL: https://conductatlas.com/platform/paypal/paypal-user-agreement/acceptable-use-policy-prohibited-activities-and-account-liability/
Accessed: April 28, 2026
Classification
Severity
Medium
Categories

Other provisions in this document