21 DAY HOLD FINANCIAL SERVICE OMBUDSMAN WANTS TO HEAR FROM YOU

[hmmar-spier]

Having lodged a complaint against Pay Pal and Ebay in regards to illegally freezing funds and also referring the matter to the privacy commisioner.  The Financial Services Ombudsman also wants to hear about accounts where funds have been placed under the 21 day hold. Their office is anticipating an across board deluge of complaints and they wish to be advised of individual cases as believe this is a breach of law.

[indigorosey]

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@lyndal1838 wrote:

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@i-love-my-sheep wrote:

I wonder if it's in reference to the school yard gossip about PayPal investing the money into the short term money market? There is no proof of that, it was just an assumption by many members (I even said it myself in jest).

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Paypal's APRA licence is very strictly controlled....they are a deposit taking/money transfer service and are not allowed to pay interest on the money they handle.  I assume that also means they are not allowed to invest it for their own gain either.

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That is in itself an assumption - like other financial services they do indeed invest funds - they would be silly not to! It's even in your user agreement:

10.4 In consideration for your use of our Services, you irrevocably transfer and assign to us the right to earn interest that may accrue on funds held by us. This applies only to interest earned on your funds and does not grant us any ownership right to the principal of the funds you hold with us, subject to our User Agreement.

[indigorosey]

More specifically 🙂

15. How PayPal manages the funds in your account

15.1 Any funds held in your account will be pooled with money from accounts of other customers and deposited into a licensed bank in Australia. This does not affect your right to withdraw funds from your account.

15.2 If there is a positive balance in your account and you have not transacted in the period prescribed under the Banking Act 1959 (Cth), your funds will be subject to the unclaimed monies laws.

[lyndal1838]

I stand corrected.   I never keep any money in my paypal account and I am not a seller so it is not part of the agreement that affects me at all.

[indigorosey]

It something that sellers should be aware of.

Not to say they are doing this to earn profits; it is likely primarily to protect their business. In Australia (and many other countries) they have to hold a certain amount in reserve under the Prudential Standards for this purpose. Account holders in return are then protected by a 'money back guarantee' in case PayPal go bust 🙂

[i-love-my-sheep]

Ouch!! My account is quite wealthy at the moment because I've had a few really good weeks of sales and have bought very few things for myself. Might have to move it out I think!

[lyndal1838]

Paypal only has a deposit taking/transfer licence with APRA and have to have a "float"  of $5million or 5% of the money they have in have in hand for their customers.  They are not allowed to pay interest on that money to their customers.

The way I read the rules they are not covered by the Government Guarantee which is one reason not to keep too much money in your paypal account.

[magpie13*8]

mine got frozen, even though ive had the same paypal account for years, I uploaded the docs they wanted and rang three times, saw this thread, put in a complaint to the ombudsman, and another to paypal, it was a sunday morning, and my funds were released that night!!

call their bluff

[2106greencat]

[second*hand*rose]

I recently sold an item that was paid through paypal. I checked the status on AusPost site daily & sent the buyer a nice email stating the 21 day "hold" on funds and asked them to please leave feedback straight away as soon as item was received. She left feedback this morning. I promptly rang Paypal and told them to release the funds as it was delivered on AusPost and feedback had been left. 4, YES 4 times the phone consultant put me on hold to check that the feedback had in fact been left and to check the AusPost website. As she couldn't see the buyers name - only the stupid abbreviations that Ebay use, she tried telling me that it was a different buyer. After much arguing and to-and fro-ing she gave in.

She then told me that as a courtesy this ONE time they would release the funds straight away  WINNER lol

I told her in my not so happy Australian lingo ( & some colourful language too ) that it would see them in court next time IF I choose to sell on Ebay lol

[vintage_silverville]

I tried the FSO but got fobbed off til April so I called Paypal too and was charming,sweet and flattering=result? she released the lot so honey does work better than vinegar after all.