£21'472.31 on hold/jumpstart reserve?


PayPal currently holds £21'472.31 of our earnings. I would be greatly appreciative should anyone wish to take the time to read this and offer up any information in response. Thank you.


01/08/23 - All funds from that day's transactions are placed on hold.

After a phone call that same day, I received a communication from a PayPal representative via PayPal's messaging service instructing me how to manage the orders, so the funds could be processed. The representative informed me that our funds would be released in 7, but possibly up to 21 days later. I took the advice and followed the instructions given.


After follow-up calls over the next few days to attempt to confirm a solid release date for this outstanding balance, and providing PayPal with certain documents, such as bank statements, birth certificate, etc., no dates were ever given nor a reason why.
I made an official complaint via PayPal's messaging service.


08/08/23 - Received communication from PayPal via their messaging service stating that I should contact the Financial Ombudsman if I was dissatisfied with their actions. Needless to say, I was, as they had held our funds and not given a clear reason why or offered any further means or method for us to act in a way to assist them.


09/08/23 - In a phone call to PayPal, I mentioned that it would be much simpler at this point to actually cancel the transactions relating to the money on hold and have my customers pay via a BACS transfer, as many of our clients do.
I was informed I could not do this; even though an hour or so prior to the phone call I had done just this, as one of our customers wished to change the funding source for his transaction. (PayPal had informed him to instruct me to refund the transaction, then he could pay again using his preferred credit card. To which both he and I did.)
A disagreement ensued with the PayPal representative regarding refunding the funds on hold. The representative then informed me that, to quote, 'I was scuppered' and that 'You've fallen into the trap, you have'.


Much to my surprise, that evening, our PayPal account showed release dates for the money on hold. £19'094.86 would be released on the 22/08/2023 an[Removed. Phone #s not permitted]23


I assumed at this point all was settled.


10/08/23 - Interesting, all the transactions that were on hold and previously showed a little orange 'on hold' icon next to the transaction information now showed as a little jolly green 'completed' icon. This now meant that any refund attempted would take the funds directly from our bank account and not from our funds that PayPal has on hold.


13/08/23 - Whist in the process of attending to some accounting matters, I was aware that the release dates had now gone. Nor were they rescheduled for any other week.
I made yet another call to PayPal that day to be sheepishly told there was now was no known release date and that the funds were now held in a reserve, to be specific I was informed it was called a 'Jump Start' reserve.
My account information regarding this hold and the PayPal User Agreement section on this topic make no mention of such a thing. The PayPal UK User Agreement states 'there are two types of reserve' these being a 'Minimum Reserve (AKA - Upfront Reserve)' and a 'Rolling Reverse'.

At no point was I given prior knowledge that this would take place. I only became aware of this information because I had actively called PayPal myself.


At the close of the phone call, the PayPal representative informed me I would have a response within 24 hours as to why the release dates had been revoked.


No response was received.


For the sake of clarity, I'll quickly outline the questions I was asking PayPal in all these following phone calls.
Why are you holding our funds?
Why were these release days revoked?
Why was no prior notice of this action given?
How could the funds be on a temporary hold with stated actual release dates, and then overnight be placed into a vaguely defined reserve?
When will we have access to these funds?
And failing all else, why won't PayPal allow me to refund the customers transactions from the on hold amount?


15/08/23 - In a phone call, a PayPal representative informed me I would have a response within 72 hours.


16/08/23 - Information was submitted to the Financial Ombudsman.


360 hours pass. No communication was received from PayPal.


29/08/23 - Case accepted by Financial Ombudsman.


30/08/23 - In a phone call, a PayPal representative informed me I would have a response within 7–10 days. Interestingly - during the first phone I made that day, at around the 10-minute mark, I mentioned I had taken this matter to the Financial Ombudsman, the phone call was terminated. A following call was also terminated.


10 days pass. No communication was received from PayPal.


08/09/23 - In a phone call, a PayPal representative first informed me that the review information had been sent to the wrong department, then after 15 minutes on hold the representative corrected the previous statement and said the account was still under 'investigation'.
I was sent two emails during the course of our conversation that the representative said would explain the reserve.
Aside from the automated framework of the email, it is basically a sentence on each message.

Being thus:


'We've held £21,472.31 GBP from your available balance immediately as part of the reserve.'


'We'll hold 85.00% of your daily sales until a minimum reserve amount of $300,000.00 USD is reached.'


So not only are PayPal holding over £20k in current funds, they intend to take 85% from any further sales?!


I informed the representative this didn't address anything I'd asked. I would have a response within 7–10 days...


10/09/2023 - Today. 28 days since I was told I would receive a response 'within 24 hours'. PayPal has actively done nothing. All communication has been from myself towards PayPal. 41 days since PayPal put our money on hold. This is a long time in business terms. Anyone is business knows this, especially PayPal.


Our business was established over 25 years ago. We opened our account with PayPal in 2003. 20 years ago. It's been impeccably managed in all that time. Never had a dispute, never had a chargeback.
Our products are high quality and in high demand. We have a small very loyal customer base with close to 80% of those being return customers.
Yes, we operate on a pre-order basis. Yes, we sell electronics. We have operated this way in all the years we have held a PayPal account and never once has PayPal had umbrage with our business model, until the 1st August 2023. We are a professional VAT registered business that any customer can contact in minutes by picking up a telephone.


If it's simply a case that PayPal, or someone at PayPal, does not like our business model. Fine. No love lost. Allow me to refund the customers from the on hold funds, and we'll deal with the transactions in an alternative way.


Withholding funds in this manner is a stranglehold on any business, and the stonewall constant block of information is one of the most unprofessional things I have encountered in all my years in business. The sad thing is, I have championed PayPal for years. Always had a most excellent relationship with them. This situation is very disappointing to say the least.


All in all. It's in the hands of the Financial Ombudsman now. I just thought it was worth the gamble of posting here. You know, as the saying goes, if you throw enough **bleep** at the wall some of it sticks.

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The same thing happened to a transaction of mine yesterday and my payment was put on hold. My client's order is time sensitive and its a service, not an item for critical thing for his business, and now i have to wait for 72 hours for the "check up" PayPal is doing. Its very fishy, and i think its time, people start shifting into other payment solutions since this one  started declining. 

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