Can PayPal Legally Withhold Money From Ebay Sales For 21 Days?

[buythis005a]

Can PayPal legally place a 21 day hold on money that came from selling an item on ebay?

I sold an item for $200 ($194.90 after palpal had taken their fee) and as soon as the buyer paid PayPal placed it into a 21 day hold.

I have a 100% seller rating and this is the first time I have been denied access to my own money. I would have received a negitive feedback if I held off from posting the item until the funds had cleard.

Basically Paypal have found a way to give themselves an interest free line of credit at our expense. 

Surely this can not be legal in Australia?

[clarry100]

Not sure about the legalities of it but...

There have been a number of threads on here about this recently.

They seem to be doing it to selling accounts that are less than 90-days old.

Some people have met with success by phoning them to have the funds released. Others not so lucky.

A couple of us established sellers (myself included) opened a case of complaint with the FOS (Financial Ombudsman Service).

Within 48-hours of that they have released the funds and in at least one case have said the account would be exempted from any future funds holding.

So if a call to them is not successful then open a FOS case. And you might mention you are aware of the FOS.

This seems to get their attention and also a $1500 fine as I understand it.

[phorum_junkie*]

Of course it is legal, do you honestly think Paypal don't have a team of legal experts to go through their terms and conditions making sure they pass muster with the site policies are applied to.

It is actually some years ago since Paypal added the policy that they can hold funds up to 21 days however it was only used with dodgy sellers, they now apply it to all newish or seldom used accounts.

Remember Paypal offer buyer and seller protection and if an unproven seller can withdraw their funds quick enough then Paypal has to cover the loss and at best it will cost them time and money to recover the funds from the seller, at worst they have disappeared of the face of the earth never to be found.

If that happens often enough then Paypal will have no option but to raise their fees, I would rather have my funds held for 21 days than paying more on every transaction.

You won't survive long if you do not have enough funds to cover postage while waiting for funds to clear, in fact you will peobably end up at the wrong end of an item not received dispute and a pretty red dot.

[collect247]

Don't forget that ebay FVFs will be $19.80 on a $200 sale and yes PayPal is holding money on accounts that haven't had a sale in a while and all newbies.

[buythis005a]

I have been emailing them for over a week and have received no response. So much for them getting back to you within 48hrs.

I summited a case with the Financial Ombudsman Service this morning.  

I would like to know that they will stop this fraudulent practice with everybody and not just me but I think my eBay selling days are now over due too many fees and issues with both eBay and PayPal.

[buythis005a]

So if legal and everybody is happy with being denied access to their money, when will the Banks and Credit Card company's start adopting this policy? They would not be able to that's why.  

I am a verified user with a 100% feedback score and last sold an item less than 3 months ago, so maybe you can see why I am annoyed. I do not like being charged $6 just for the 'privilege' of using PayPal then only to be denied access to my money.

[clarry100]

I will be interested to see the outcome of the FOS complaint you have opened this morning.

The other sellers on here who have had success with the FOS method are very regular sellers who operate small business activities and who have multiple accounts selling lots of items sucessfully every day. It was when we opened a new selling account that they started to put the hold on funds from sales on the new accounts, despite having a solid & established track record on other ebay selling accounts linked into the very same paypal account.

In your case it looks as tho you are an occasional seller even tho you may have had the account active for more than the notional 90-day period. So perhaps this will make a difference, perhaps not.

[hmmar-spier]

Yes imaging your employer crediting your wages to your bank account and the banks withholding them for 21 days. Riots would ensue.

[fred_foofighter]

Can you please point to any cases were this has been tested in court.  Or is it just another case of big business bullying its customers into believing they have no other opinion other than comply.  While you may be happy to have your money held for 21 days some of us aren't, and actually understand what is meant by cashflow because you clearly have no idea.

[kizacks]

I guess that's the idea behind corporate greed, with their room of lawyers, to continue to push the boundaries, and even in some cases cross it (minimise collateral damage and public outcry the best they can). To suggest because a company is armed with lawyers, that they would never cross the boundary is quite amusing.There has already been records of Ebay/Paypal crossing the boundaries, but the public can only fight so long. It takes a lot of people/media/resources to conjure up enough noise that the regulatory bodies will actually stand up and take notice.