A far better response from PayPal would've been to return the money to Mat, explain the issue to their customer and request that they create a legal account. I

A far better response from PayPal would've been to return the money to Mat, explain the issue to their customer and request that they create a legal account. If every company assumed that every person with a discretion to their name was an undesirable customer, virtually none of us would be customers of any company.