I think paypal can go jump. But really, if that started happening to bunches of people I think we'd just switch to some other service instead. Paypal is only used at all because it's assumed that everyone already has an account. They just can't steal from people if they do those things which is why they even would be against the ToS.
You must have done something on an even grander scale than Half-Saint has so far though for them to have even noticed. That or you just got lucky.