It'll be interesting to see if there's a follow up.
As a partial update, after spending 30 minutes clicking every page of the dashboard, it was obvious that money was stuck, and my friend couldn't dispute it as it was sent as a gift, as it wasn't payment for work. Luckily, if you head back to your settings and flick back to the old web UI whilst it's still available, the refund button shows up in the view transaction details page, and it let me refund it. I lost the £20 or so in fees, but at least I can pay some unexpected bills more easily now.
If they're saying you can't agree to the ToS when you're under 18, should they be able to hold on to the monies for 180 days because that's what the ToS said when you agreed to them?
I'd say there are at least 3, don't even need to read the article.
If we really want to search all regulations. We should be about to find at dozens to justify the action, without too much issue.
I have learnt 3 things from my time on the other side:
1) When you dig deeper, for 90% of complaints, the actions were justified.
2) A percentage of these, ranging from little to quite sizeable depending on the issue, is assimilable to complete fraud.
3) There are tons of regulations in finance. From annoying rules per good/country to anti-money laundering, including plain theft and anti-terrorism supporting scheme.
4) Companies do what they do because of regulations, the regulations themselves are there because the world is a mess.
PayPal could and should find a better way to handle transitioning people who, out of necessity, lied about their age when they first signed up. Was signing up under false pretenses a form of fraud? Probably, but it's a form of fraud that's essentially benign and is so pervasive, online and off, that it's just stupid to treat it as such.
You signed the contract when you started your account. Which, is why they want you to start a new account so that you will sign a new contract with them.
It seems like PayPal went bananas applying a peculiar policy. They want to be a bank, but you can be 12 and still have a bank account.
Perhaps PayPal should/could just ask the OP to get a signed permission slip from the parents to cover this. :-)
However, it's likely that minors are not allowed to have "adult" bank accounts like PayPal.
If so, registering is committing fraud and paypal is forced to shut down the account.
Typical case of a children going against the law and the laws fights back and the child doesn't like it.
Usually in the US, minors can form contracts just fine, but such contracts are, prior to execution, generally voidable at will by the minor. As a result, people prefer not to enter into contracts with minors except in situations where voidability doesn't create a significant risk for the other party.
OTOH, there is not a lot of reason for a the fact that the other party was a minor when entering the contract to be a problem after the party reaches majority, so while it may be a technical past ToS violation, it doesn't make sense to make a big deal about it if you didn't catch it while they were a minor. It's just creating bad customer (and public) relations to no benefit.