PayPal pending payment

[socrcoach17]

I would like to hear from someone at PayPal the answers to several specific questions relating to the pending payment policy. I have read the various threads on this, and the relevant section of the Terms of Service Agreement, but these are questions not answered elsewhere.

FIrst, the background. Like so many others here, I was caught by surprise when payment was held up for an item I sold on eBay. The item sold for $455 and because it is heavy and bulky, the shipping charge was $225 (in the actual fact, it cost me more than that amount to pack and ship and I ate the difference). The winning bidder paid immediately via PayPal. PayPal immediately marked this as a "pending" payment. The item was shipped less than 48 hours after the auction closed and delivered yesterday. I supplied the tracking information to PayPal/eBay as instructed. The payment still shows simply as "pending" and when I click on "Details" I am told that status applies for another 14 days, OR 3 days after PayPal can determine that the item was delivered, OR 3 days after the buyer leaves positive feedback.

There is no way for me to verify that PayPal/eBay knows now that the item was, in fact, delivered yesterday. There is no way to know when and if a change in pending status has occurred. The policy is ambiguous as to whether delivery even matters for an eBay auction item, or if only positive buyer feedback will release the funds in less than 21 days.

QUESTION 1: If the item was sold pursuant to an eBay auction, is the pending status changed when the SOONER OF or LATER OF the two listed events occur: provable delivery or positive buyer feedback? How can I verify that PayPal now knows the item was delivered and, therefore, that the 3-day clock has started to count down?

PayPal positions itself as the most convenient way for a seller to accept payments, especially on eBay transactions. I was charged a $20+ fee for this transaction. I had to front the $225 shipping charge. I now have to wait an arbitrary amount of time for payment, with no feedback from PayPal as to status before or after the buyer submitted his PayPal payment transaction. In the very best case, the funds will hit my bank account two weeks from when the auction closed because of the holiday weekend.

QUESTION 2: Why is this good for me as a seller? You are charging me premium transaction fees, what service am I AS A SELLER getting in return for this policy and the fees charged?

The most basic tenet of contract law is that the parties have to agree to the terms in order for there to be a contract. PayPal's Terms of Service Agreement relating to pending payments is hopelessly vague, to the degree that I question that it constitutes a contract. It would not be a valid contract for me to say, for example, "I can do whatever I want for any reason" and for you to agree, and for me to then take your car and your house. I could argue that your agreement was stupidity on your part (which is, essentially, PayPal's response to sellers in the various threads and is vaguely insulting), but I could not defend such capricious actions in court based on that "contract." Particularly in a dependent situation like this

The PayPal pending payment policy does not, for example, let me know, as a seller, whether I or any given transaction are subject to being pended, what I can do to prevent it, or what specific criteria PayPal will use. PayPal relies on terms like "high risk" that clearly mean something very different to the sellers who have spoken out in this forum than they mean to PayPal. In no way would I, as a reasonable seller, read the text of the TOSA and interpret it as meaning what PayPal is, in fact, doing. You are doing things that are not reasonable interpretations that a reasonable seller would be expected to conclude are consistent with the TOSA's language. They appear to be arbitrary and capricious and unrelated to the stated policy.

In short, a seller "agreeing" to the TOSA can have no basis for understanding what it now turns out PayPal means by those words.

QUESTION 3: How does the TOSA, regarding pending payment holds, constitute a valid contract, given that you provide no way for the seller to know what he/she is agreeing to and that reasonable sellers clearly think you are interpreting this language in ways opposite to the way they understand it?

Given that PayPal relies on its "sole discretion," there is an implied obligation for the policy and its enforcement to rationally relate to its purpose.

As with so many others, there is no evidence in my case of any kind of a problem. This was a personal sale, but I own a company that accepts credit cards based in large part on my own credit history, and have had no problem with approvals for those transactions from banks, or any problems with any specific transactions. There is no history of complaints against me personally or my company, I have no criminal history, no financial fraud, solid credit rating, bank account has been verified. In other words, PayPal has reached a decision about my "risk" that is opposite what other financial institutions that provide similar services have concluded.

QUESTION 4: How does the pending payment discretion policy of PayPal rationally relate to actual risks to buyers, its putative purpose? What does the term "high likelihood" mean anyway - 50%? 10%? 1%? What statistical evidence does PayPal have that the criteria used are predictive of a "high likelihood" (whatever that means) of buyer dissatisfaction? Is there any such evidence at all that eBay frequency is a reliable predictor, or is this just someone's guess?

Clearly, this policy benefits PayPal financially. You get the benefit of interest on the funds while they are in pending status. It is like travellers checks - the financial institution makes money on the float. Therefore, PayPal has set itself up with a clear conflict of interest, between fairly interpreting ambiguous or discretionary sections of the TOSA, e.g., what constitutes "risk" to buyers, and what is financially beneficial for PayPal.

QUESTION 5: Will PayPal remove this conflict by paying interest on the funds held? If not, how can you claim to not have an egregious conflict of interest in your unilateral interpretation of the TOSA?

[femsol]

Sorry but I posted too soon.

The other link about the possibility of the paypal spinoff is here:

  http://blogs.barrons.com/techtraderdaily/2010/03/18/ebay-time-to-spin-paypal/?utm_source=feedburner&...

[chogidog]

So I'm wondering... Is there any fixed amount of sales, or ANY definitive qualifications spelled out for removing the pending requirement? I'm fairly new to ebay sales and the hundreds that they're holding was quite a surprise as I didn't see it coming. Now I do see their reasoning for doing it, and can ALMOST agree. But I can't seem to find anything laid out so I can know if they're going to keep doing this or if it's just because it's my first sale. I sold a laptop and the winning bid was in Micronesia so i can't even track it to know for sure when they get it. I have a number more of laptops to sell but I don't know if I should bother with this avenue of sales or just stay with Craigslist for all my sales as I get my cash immediately. 

[Arlykat]

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@femsol wrote:

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@Arlykat wrote:

Here's a quote of something I just wrote and posted.  We CAN do something.  Help us.

I've been reading this thread for two days now. I am about to start selling again on eBay after a 6 year hiatus and I have over 3000 positive feedbacks. I am now soooooo discouraged over all of this idiotic and seemingly criminal actions of PayPal collecting interest on all the money it is holding from sellers for such a long time for such stupid reasons. I'm really hoping to find a large list of whatever places people can recommend that I can use to sell on eBay and not use PayPal yet have people pay me by using other places online that wil still be allowed by eBay. I don't have a store or my own credit card system to use. Anyway, I'd appreciate hearing what other people are using. I've only heard mention of google offering something and I'll try to find where and what that is. IN THE MEANTIME, HERE IS A LIST OF LOCATIONS OF PAYPAL AND EBAY HEADQUARTERS.

"On October 3, 2002, PayPal became a wholly owned subsidiary of eBay.[3] Its corporate headquarters are in San Jose, California, United States at eBay's North First Street satellite office campus. The company also has significant operations in Omaha, Nebraska; Scottsdale, Arizona; and Austin, Texas in the U.S., " eBays headquarters are still, I believe, in San Jose, CA.

What I highly suggest is that people sit down and send an email to the Attorney General of California and also in whatever state they live in with a short paragraph about what is happening and these links directly to the thread we are talking on. That link is

https://www.paypal-community.com/t5/eBay/PayPal-pending-payment/m-p/16477#M3220. The link to the main community site is

https://www.paypal-community.com/t5/eBay/bd-p/eBay. I am pretty sure the first link brings you right to the beginning of this thread.

Generally, to find the email address of your state's Attorney General you type in your state.gov (i.e. CA.gov) and then search for Attorney General. 90% of the time 's office lists their email address for you to contact them directly. I have found they always get the message and they always respond when you write to them. Let's just all get together and make PayPal even more popular than it is by having each States' highest legal attorney read a little bit more about them that they'll find in the links above. I do hope people act on this, it does take one drop of water to begin a flood and PayPal needs to be flooded by interest of each individual state's Attorney General. Let's do this.

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Hi Arlykat,

I have been following this fiasco since January and I too post links and continue to offer support in whatever way I can even though I am a casual seller and have moved on to other auctions and Craig's List.

Since you are interested in the links, news and other information I suggest strongly that you check out the forum entitled HORRIBLE IDEA TO HOLD FUNDS FOR 21 DAYS!!

It has been the most active of forums in this community up to 130 pages and by far has a wealth of information that I am afraid is not being read by posters on other forums.  Your suggestions are good and have been posted and followed.  I have posted links to any eBay news, especially what is taking place in international venues. 

Most important is that there is a class action suit and you can search through the forum "class action"  for contact information of one the law firms that initially had interest in this matter back in November and is now ready to file but are still taking names and stories to be included in the class action.  You can also go to letssuepaypal.com  for information on the law firm, names and numbers.  If you check on any of my posts in that forum you will see that I did some research on eBay/PayPal's litigation history and in 2002 eBay/Paypal did the same thing-held funds.  A class action was put together and in 2004 eBay settled for 9.0 million+ for the class and 4.2 million for the attorneys. 

Personally I have been attacked for stating that people should at least register for the class as many think it is a waste of time--it is not.  Additionally I do not care if the lawyers walk away with the big bucks-it takes a great deal of money and time to pull together a class action--I am involved for the principle--it is just wrong.  Another good site that updates throughout the day and gives current information on eBay's stock and stories is http://www.techinvestornews.com/eBay/page-one.html  There you can read about eBay's stock price and all up to date news--technical, international and legal.

This link will make you feel so sorry for poor John Donohue as it appears his compensation last year dropped by 50%.

This link talks about how John Donahoe and 5 other executives had to take a bad pay cut in 2009--so sad for them-- however the President of PayPal got a bonus--hmm maybe because he is in charge of PayPal holding our money!!  http://www.marketwatch.com/story/ebay-cuts-pay-of-top-execs-2010-03-19?dist=afterbell

it is a complete tangled mess but what is interesting is that paypal has to register differently with each country it is in and follow their monetary policies.  Countries such as Germany, UK, Australia and India are already investigating their practices--probably another reason why eBay is gearing up to do major business in Asia.

Hope this helps to provide you more information,  Knowledge is Power.

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Thank you sooooooooooooo much for your reading and participating in my suggestion.  Also, I will read all of the links you mentioned.  It really is unbelievable how paypal and ebay can get away with this.  For me, personally, I sold back when ebay was new and paypal was just coming into existence and listed enough for the 3000+ positive feedbacks.  Drifted away and now need to come back and start listing again because I NEED the money.  My dog might have cancer and I don't have the money to take care of him, my boy, my son.  I got everything ready to begin listing again, emails, changing addresses (moved from CT to CA recently), updating my eBay account, etc.  Then I happened into this particular thread.  I am so depressed now it is hard to understand, considering I am on disability for Major Depression so this blatent misuse of funds by paypal is going to not allow me to list because I am one of the people who really NEED the money.  Ugh.  Anyway, thanks again for all your info and bravo for all your hard work and dedication on the side of justice and fairness.  I will gladly support anything you need support for.  Take care.  Arlykat (BremmN)

[Arlykat]

Hi Femsol.  I've been going through the threads you mentioned to me and I'm having a "DUH" moment it seems.  Can you please tell me where I can find the name and address or better yet, a Link to the original lawsuit and lawfirm that is handling the case against PalPal?  There are so many links off of links from different replies to different replies that I just can't find where to go to actually SIGN UP for the class action lawsuit.  I am definitely going to sign up as I encourage all Sellers on PayPal to do.  I went to 'letssuepaypal.com and can't really find the info I need there.  There is a telephone number but I'd prefer clicking on a link if I could.  I also went to Class Action and can't really find any info there either.  I'd appreciate your help and also thank you for all the help you are giving to this unbelievable problem with PayPal.  So, can you give me a link or address and name of the lawfirm?  I am kinda drawn to the original lawfirm that actually took the time to look into this all and are now taking the case.  If there are other firms suing also that's good too and if one of their firms is better to join than the original please let me know.  Otherwise, I follow the people who listened to the people first.  Thanks again.  Arlykat

[femsol]

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Arlykat wrote:.....
There is a telephone number but I'd prefer clicking on a link if I could.  I also went to Class Action and can't really find any info there either.  I'd appreciate your help and also thank you for all the help you are giving to this unbelievable problem with PayPal.  So, can you give me a link or address and name of the lawfirm?  I am kinda drawn to the original lawfirm that actually took the time to look into this all and are now taking the case. 

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Arlykat I will try but my posts have been deleted--I actually have an email form the administrator however let me try in the second post.  In the meantime if the post does not come through with the info you want I would be glad to help and forward emails to you with this information  Think about my email--it is femsol at *** dot com.   See next post.

[femsol]

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@Arlykat wrote:

Hi Femsol.  I've been going through the threads you mentioned to me and I'm having a "DUH" moment it seems.  Can you please tell me where I can find the name and address or better yet, a Link to the original lawsuit and law firm that is handling the case against Paypal?  There are so many links off of links from different replies to different replies that I just can't find where to go to actually SIGN UP for the class action lawsuit.  I am definitely going to sign up as I encourage all Sellers on PayPal to do.  I went to 'letssuepaypal.com and can't really find the info I need there.  There is a telephone number but I'd prefer clicking on a link if I could.  I also went to Class Action and can't really find any info there either.  I'd appreciate your help and also thank you for all the help you are giving to this unbelievable problem with PayPal.  So, can you give me a link or address and name of the law firm?  I am kinda drawn to the original lawfirm that actually took the time to look into this all and are now taking the case.  If there are other firms suing also that's good too and if one of their firms is better to join than the original please let me know.  Otherwise, I follow the people who listened to the people first.  Thanks again.  Arlykat

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Arlykat:

We did close down the letssuepaypal site to new posts but if you check status and then Bonehead's last comment you will find info but let me give you this link:  http://www.freedweiss.com/Attorney-Profiles/

This is the original law firm and I appreciate your loyalty to the firm that has been there from the beginning.  Julie MIller is the specific  attorney and here is her link:  http://www.freedweiss.com/Attorney-Profiles/Julie-D-Miller.shtml

Here is her direct number or there is a toll free number listed:  312-220-0000

It is important that you tell her where you received her name and number ( the "Letssuepaypal website and that "Brian" referred you ) so she will know the nature and background of your call.  This was old info from when this firm was checking us out for a case.

From the email that those of us who had registered  received, is this news which I just love:   "have also been told that the Law Firm should be posting TV commercials, and print ads around the country, in an effort to encourage others who have been victimized by PayPal to join in."

I had posted the original email about this on all of the active boards but it was deleted from all.  I hope you get this and will check back.

Thanks for asking.  At least I am not being slammed for supporting this class action.

[Arlykat]

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@femsol wrote:

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@Arlykat wrote:

Hi Femsol.  I've been going through the threads you mentioned to me and I'm having a "DUH" moment it seems.  Can you please tell me where I can find the name and address or better yet, a Link to the original lawsuit and law firm that is handling the case against Paypal?  There are so many links off of links from different replies to different replies that I just can't find where to go to actually SIGN UP for the class action lawsuit.  I am definitely going to sign up as I encourage all Sellers on PayPal to do.  I went to 'letssuepaypal.com and can't really find the info I need there.  There is a telephone number but I'd prefer clicking on a link if I could.  I also went to Class Action and can't really find any info there either.  I'd appreciate your help and also thank you for all the help you are giving to this unbelievable problem with PayPal.  So, can you give me a link or address and name of the law firm?  I am kinda drawn to the original lawfirm that actually took the time to look into this all and are now taking the case.  If there are other firms suing also that's good too and if one of their firms is better to join than the original please let me know.  Otherwise, I follow the people who listened to the people first.  Thanks again.  Arlykat

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Arlykat:

We did close down the letssuepaypal site to new posts but if you check status and then Bonehead's last comment you will find info but let me give you this link:  http://www.freedweiss.com/Attorney-Profiles/

This is the original law firm and I appreciate your loyalty to the firm that has been there from the beginning.  Julie MIller is the specific  attorney and here is her link:  http://www.freedweiss.com/Attorney-Profiles/Julie-D-Miller.shtml

Here is her direct number or there is a toll free number listed:  312-220-0000

It is important that you tell her where you received her name and number ( the "Letssuepaypal website and that "Brian" referred you ) so she will know the nature and background of your call.  This was old info from when this firm was checking us out for a case.

From the email that those of us who had registered  received, is this news which I just love:   "have also been told that the Law Firm should be posting TV commercials, and print ads around the country, in an effort to encourage others who have been victimized by PayPal to join in."

I had posted the original email about this on all of the active boards but it was deleted from all.  I hope you get this and will check back.

Thanks for asking.  At least I am not being slammed for supporting this class action.

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Thanks for the info Femsol.  I will get in touch with the people you mentioned.  Regarding your getting "slammed for supporting this class action" statement you made, I'm sorry that happened to you.  I'll appologize on behalf of people who aren't really all that certain of what's going on and how it literally DOES take huge action, not just mouthing off on the site here about how mad you are at PayPal cheating people, it takes ACTION to stop this illegal process PayPal is and has been presently doing to many Sellers who were/are loyal to them.  Complaining only will get some steam off your chest, it won't get you any money and it won't get PayPal to stop what they are doing.  If class action suits make people uncomfortable or scare them, don't join in.  Don't condemn those who do know that many times that is the only way to fight a large company that is doing many wrongs to many many people.  Yes, there are a lot of posts on here complaining.  The posts are plentiful and earnest in their concern/anger/frustration/panic.  The posts are good and necessary and I hope they continue threefold.  Does anyone see anything all of the posts have done for us sellers since the posting to PayPal regarding this problem began?  Nope.  Nada.  It will take someone in the legal field that PayPal cannot ignore to say to them in a courtroom, ultimately, 'Hey PayPal, PAY pal, and reimburse the many sellers that could have drawning interest on their own money instead of you doing it.'  I NEED to start listing and make money on eBay again right away and am so depressed, angry and frantic that I will have to deal with PayPal.  I can't afford it.  So, speaking only for myself, I say do whatever it takes to stop the actions and inactions of PayPal so we can start being what we have been and are, good sellers again on eBay who really don't want to let our buyers down. 

[marble]

I could not agree more. I just sold something in Japan for over $2,000. PayPal immediately took its fee. I hope my Japanese buyer whose English is shaky at best understand how to leave a feedback on eBay... This is the end of PayPal. It was a good thing for years, No longer.

[jlcs]

This is ABSOLUTELY CORRECT IN EVERY WAY.  I have money pending from a transaction that should have covered the shipping costs.  I have had to borrow money to ship the item.  It has been shipped and tracking numbers provided and still the payment is pending.  Pay Pal should at the very least have to pay interest on MY MONEY that they have been holding.  It is hard to imagine how much interest money they are stealing from customers while "pending payments."  It is wrong, and I consider it theft.  Paypal needs to address this situation.  I hope that customers start a class action law suit that corrects this.  It is WRONG WRONG WRONG!!!!!!!

[Temp20220523ah]

What I don't understand is why PP decided to hold my payment for $80.00 and my next sale of $25 was put directly into my account? If I am high risk due to their standards, why am I not high risk for every sale?

 PP and Ebay make it impossible to do business without eachother and bank (literally) on the fact that people will link their bank accounts to make up for the pending funds. CROOKS. Plain and simple.