PayPal Holding Your Funds? State Regulators Want to Know By Kenneth Corbin EcommerceBytes.com December 16, 2011 For many eBay sellers who use PayPal to process payments, holds of up to three weeks (or in some cases, even longer) are simply a reality of doing business. PayPal generally explains the policy of holding funds as a response to transactions that are associated with risk or buyer disputes, though sellers often complain that the holds occur in situations where neither condition is in play. Moreover, critics of the policy have maintained that the holds are commonplace to the point of routine, occurring far too often to be explained by suspicions of fraud. What many sellers may not know is that they can seek redress from state regulators if they feel the holds are unfair. "If people feel that they have undue delays the best and the quickest way to find out why or how is to write a letter to their state regulator," said Joseph Rooney, assistant commissioner with Maryland's Office of the Commissioner of Financial Regulation. According to Rooney, every state but two - South Carolina and New Mexico - has a law governing money transmitters, a broad classification that includes financial institutions such as money order and travelers check services, as well as online payment outfits like PayPal. Many of those statutes cap the period of time that money transmitters can hold onto payments before releasing them to the recipient.
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