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I have started a software consultancy, I plan to get money from customer in US using paypal to me in India. If the customer has a dispute and I don't agree to refund back.

  1. Can paypal get money from my Bank Account without my authorization. This is assuming they have transferred the funds to me.
  2. What actions can paypal takes against me if charge back amount is very high and I don't agree / pay them.
  3. Is there any case it is going to effect my bank account, i.e. is there any chance paypal can block my bank account in India.

Thank you

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First off... If you provide good service than you shouldn't worry...

Since you are providing a service and your customers send payment to your PayPal, if there is no dispute made within 90 days, the customer cannot dispute further.

However if it is disputed within 90 days than you may run into some trouble. But it may be in your favor if PayPal finds no signs of fraud and since it's a service payment, PayPal cannot really track it compared to if your customers paid you for a product which can be disputed up to 180 Days?? I may be wrong on that one. However if it does get disputed and PayPal favors your clients than you have to pay it back one way or another.

You may want to ask your customers or put yourself a description of the service and terms in the invoice. It may help resolve future disputes.

I know this because I have called PayPal customer service and ask which I suggest you do too.

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    You can and should worry about disputes, even if you provide good service. Additionally, paypal can and does routinely freeze accounts even without any allegations of fraud or any disputes.
    – ChrisInEdmonton
    Aug 25, 2015 at 14:33
  • @ChrisInEdmonton Well that may be true, that is just bad practices by PayPal. IMO.
    – NuWin
    Aug 25, 2015 at 18:05
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From my experience using PayPal for selling products on eBay (and for the last two, experiences of a friend)...

Can paypal get money from my Bank Account without my authorization. This is assuming they have transferred the funds to me.

They can't pull money from your bank account without your authorization. They will, however, take the money from your PayPal account if it's still there, or leave you with a negative balance if you've already withdrawn. They will do this as soon as there is a claim against you and will only release the funds if the investigation ends in your favor.

Any money received would first be used to satisfy the negative balance.

What actions can paypal takes against me if charge back amount is very high and I don't agree / pay them.

They will send it to a collections agency.

Is there any case it is going to effect my bank account, i.e. is there any chance paypal can block my bank account in India.

They will block you from using PayPal. If you try to sign up again with a different bank account or credit card and they recognize you as the account holder, they will block that account as well.

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