"Our records indicate you've shared your password with another person, or you've used an anonymizing proxy to access your PayPal account, both are violations of our User Agreement.

Anonymizing Proxy is a tool that stands between your browser and the internet, redirecting all requests for web pages to the proxy servers and making you anonymous to the websites you're visiting. It's a way of providing a fake IP address to any websites you're using."

Sure enough a review of their user agreement supports this:

9. Restricted Activities

9.1 Restricted Activities. In connection with your use of our website, your Account, or the Services, or in the course of your interactions with PayPal, a User or a third party, you will not:

j. Use an anonymising proxy;

https://www.paypal.com/uk/webapps/mpp/ua/useragreement-full

I do use a proxy server. I wouldn't say it was an anonymising proxy specifically, but by it's very nature the IP it broadcasts is different to the IP assigned specifically to my connection by the ISP.

I have very good reasons for using a proxy. I do have a choice, but no doubt there are many people who connect through a proxy and have no choice in the matter, due to locked down machines, security or caching reasons.

In effect, is Paypal blocking use of all proxy servers when using their service?