PayPal is violating its own policy Section 10.2 - FILE FTC COMPLAINT

[msm_35]

Where is the policy change that allows PayPal to arbitrarily hold funds - including shipping which is not refundable anyway under my return policy - on some sales but not on others. I sold a laptop as broken for parts. It was delivered 3 days ago. There is no claim filed. I sold a working computer worth twice as much 2 days later and no hold occurred.

This CANNOT be legal - especially when my accounts are 100% - never an issue from a buyer???

 If this has happened to you, go to the Federal Trade Commission site (FTC.gov) and file a consumer complaint.

the policy states:

"

Amendment to the PayPal User Agreement, Student Account Agreement, and Acceptable Use Policy

Effective Date: Oct 14, 2009

• Amendment to the PayPal User Agreement

Beginning October 14, 2009 PayPal user agreement is being amended as follows:

We are revising section 11.3 as follows:

1. We are moving it. It will now be section 10.2.
2. We are expanding this section to allow us to place a temporary hold on amounts subject to a claim filed by an eBay user, through the eBay resolution process, if your PayPal account is your eBay reimbursement method.
3. The new language will read:

“10.2 Temporary Holds for Disputed Transactions. If a buyer files a Claim, Chargeback or Reversal on a payment you received, PayPal will place a temporary hold on the funds in your Account to cover the amount of the liability. If you win the dispute or the transaction is eligible for PayPal seller protection, PayPal will lift the temporary hold. If you lose the dispute, PayPal will remove the funds from your Account. This process also applies to claims that a buyer files directly with eBay through the eBay resolution process if your PayPal Account is your reimbursement method for buyer claims.”

[msm_35]

The policy states "high risk" that does not apply to my account or this transaction. Therefore, that policy does not apply to this transaction.

I do not have a "no returns" policy. I accept returns up to 10 days If the buyer notifies me within 3 days of receipt.

Some buyers do not leave feedback because it is not required and they don't want to be bothered.

Yes, PayPal has the USPS tracking number on the transaction because I purchased the shipping through them!

This doesn't even make since:

"When selling an eBay item and accepting PayPal payment for the item, the seller has entered into 3 separate agreements... the agreements are between... 1) Seller and eBay, 2) Seller and PayPal, and 3) Seller and buyer. Your "as is, no returns" policy is between you and the buyer... PayPal and eBay are not responsible for enforcing that policy for you.

The buyer and seller should not be able to transact if they are not in compliance with their agreement with Ebay and PayPal.

If there is an agreement between the buyer and seller that is being observed, there is no reason for Ebay or Paypal intervention. The primary agreement during a transaction is between the buyer and seller.

[profdata]

To determine if a transaction may have a higher risk of dissatisfied buyers, eBay reports to PayPal a number of factors, including but not limited to:

• Seller's % Positive Feedback in the last 30 days
• Seller's Detailed Seller Ratings in the last 30 days
• Final price for the item
• Shipping & handling fee
• Seller's tenure as an eBay member
• Seller's total number of Feedback

[sandypurins]

msm_35 wrote... "If there is an agreement between the buyer and seller that is being observed, there is no reason for Ebay or Paypal intervention."

That is correct, and... if that was the case, the buyer would not be filing a PayPal dispute.

[msm_35]

..."the buyer would not be filing a PayPal dispute."

How many times to I have to repeat that THERE ARE NO DISPUTES, NO QUESTIONS, NO CLAIMS from the buyer or seller!!!!! Please read the posts.

[Michael72]

The best thing we can all do is simply not use PayPal...

http://www.google.com/hostednews/afp/article/ALeqM5iODFWhaFoN-9kP80MamuARuedQ5g

[msm_35 · Accepted solution]

Wow! I hope is takes off. Wonder if Ebay will "accept" it as it has ProPay eAuction. However, that account is exclusively for US-based eBay PowerSellers. As long as Ebay owns PayPal, there will always be some level of "inconvenience" in using any other payment method possibly affecting the interest of buyers. We need an e-auction to give Ebay real competition. I'll wait and see what the FTC has to say - especially about withholding of shipping fees that the seller needs to ship the item. Thanks for the info!

PayPal just released my funds but it never should have happened in the first place. Now I have no confidence on whether or not the funds from a sale will be available because the hold is placed immediately and randomly with no consideration of the "risk" of the transaction. No other transaction was "held" and the buyer was never unhappy or even concerned about the sale. The policy may have been in place for "high risk" accounts since 2008 as they say, but you can see by the recent posts that the policy has changed to include non-"high risk" accounts and transactions.

Again, thanks for the info.

[Headinsouth]

I had no idea PayPal was holding funds, and I think this is a bad policy.  I use the account infrequently, and this is a change for the worse.  I also have 100% feedback, and this stinks.  I refuse to pay PayPal fees and have them set on my funds.  I will stop accepting paypal for payment and go with other methods.

[chomper615]

Im going to charge them for the $ 350.00 they had a hold on for 7 days !!!!!!!

[sbus]

The correct part of the PayPal user agreement that governs payment holds is section 4.3:

4.3 Payment Review. Payment Review is a process by which PayPal reviews certain potentially high-risk transactions. If a payment is subject to Payment Review, PayPal will place a hold on the payment and provide notice to the seller to delay shipping the item. PayPal will conduct a review and either clear or cancel the payment. If the payment is cleared, PayPal will provide notice to the seller to ship the item. Otherwise, PayPal will cancel the payment and the funds will be returned to the buyer. All payments that clear Payment Review will be Seller Protection Policy eligible if they meet the Seller Protection Policy requirements. PayPal will provide notices to you by email and/or in the Transaction History tab of your PayPal account.

The issue is NOT whether there was a dispute filed as per section 10.2. The issue is exactly what constitutes 'high-risk' and whether PayPal is interpreting this clause to allow PayPal to hold funds solely for the purpose of using moies so held for the sole benefit of PayPal. There are no published guidelines for 'high-risk' and PayPal is interpreting solely as they wish.

More importantly, section 4.3 states that "PayPal will place a hold on the payment and provide notice to the seller to delay shipping the item.". Yet PayPal is requiring many sellers to receive positive feedback (requiring that they ship prior to receiving payment) before releasing the hold!!! This is a blatant violation of the PayPal user agreement section 4.3.

Use of funds for which PayPal was instructed by buyer to remit to seller that are held in violation of the PayPal agreement, and for which PayPal receives a benefit, is fraud. In addition, the storage of those funds is comingling of funds (PayPal's versus User's) and the entire situation is a breach of contract.

This is NOT an FTC issue - its fodder for a class action lawsuit.

[msm_35]

I'm right there with you.