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Sun July 3 2011 15:54:46

Is eBay's 21-Day Hold on PayPal Accounts Legal?

By: Ina Steiner
Sponsored Link
Hi,
Just found out that my payment is being held for 21-day under eBay's new policy, is it legal for eBay to hold my payment? Where did it get the power to hold my money?
Thank you,
Andy

From the Editor: Here are some of the articles we've written about this issue:
2008: PayPal's 21-Day Hold Policy for eBay Sellers - Link to article

2011: Cheat Sheet on eBay's Spring 2011 Seller Announcements - Link to article
" eBay will begin holding payments from buyers for sellers with a limited selling history or for those with a Below Standard performance rating until eBay receives confirmation of delivery."




Comments (31) | Permalink
Readers Comments

Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: anyone out there
       
Sun Jul 3 16:50:19 2011
Until the government oversees Pigpay they can do as they please.

PIGPAY is not a bank and therefore is not subject to those banking regulations.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
This user has validated their user name. by: Philip Cohen
       Web Site
Sun Jul 3 19:11:15 2011
They apparently think that they can do it for any length of time because they have forced you to accept the possibility of such holds, via your acceptance of their UA, as a condition of your using eBafia/PreyPal. Whether, as a “financial institution”, who is only licensed as a "money transmitter", PreyPal is statutorily entitled to make such a condition is another matter. Western Union aren’t entitled to arbitrarily hold a payee’s funds, indeed, I would be surprised it they are not statutorily required to promptly produce a payee’s funds when requested.

All a merchant needs to know about the clunky PayPal, at:
http://forums.auctionbytes.com/vbulletin/showthread.php?p=165263

What all buyers should know about the criminal activities of eBay, at:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=23540

Enron / eBay / PayPal / Donahoe: Dead Men Walking.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: MR ME
       
Sun Jul 3 19:39:29 2011
waiting for Visa's new e-mail address-based service to come on-line, then.... goodbye preypal !
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: JB
       
Sun Jul 3 20:01:57 2011
Do I see a change in their UA anytime soon. GC was never allowed on eBay. Perhaps they will add other types as well. I wouldn't put it past them.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
This user has validated their user name. by: Philip Cohen
       Web Site
Sun Jul 3 21:25:25 2011
If a merchant does not receive his funds via PreyPal then there is SFA eBay can do about holding any funds, except that the offering of PreyPal on eBay is mandated and buyers do find paying by PreyPal very convenient and a majority of eBay buyers will probably continue to pay via the eBafia’s most ugly daughter.

Even Visa’s email address-based contribution will not have any effect on eBay because eBay will never allow it to appear on eBay; even now when a buyer does choose to pay via a credit card that transaction is processed by PreyPal acting as a credit card merchant, at a cost to them of probably <0.9%, and PreyPal then charges the merchant 30c+2.9%. If you want the answers to eBay’s restrictive trade practices, simply follow the money.

eBay will not allow the appearance, nor mention, of other than PreyPay on eBay unless a consumer affairs regulator ultimately forces them to allow so, as happened in Australia when eBay attempted to mandate the use of PreyPal exclusively.

However, I am most happy to say that Visa’s contribution will undoubtedly, ultimately, have a dramatic effect on PreyPal outside of the eBay Marketplace, as those many independent merchants, who have otherwise relied on PreyPal, drop PreyPal like a hot potato. Of course, eBay’s sociopathic chief headless turkey, will be long retired to the Bahamas by them.

The fact is, anything PreyPal can do, the banks, via their partners Visa/MasterCard, can do better.

All a merchant needs to know about the clunky PayPal, at:
http://forums.auctionbytes.com/vbulletin/showthread.php?p=165263

What all buyers should know about the criminal activities of eBay, at:
http://forums.auctionbytes.com/vbulletin/showthread.php?t=23540

Enron / eBay / PayPal / Donahoe: Dead Men Walking.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: buck efay
       
Sun Jul 3 22:06:00 2011
If a buyer asks you, you can accept any payment method! You just can't ADVERTISE it on greedbay.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: MR ME
       
Mon Jul 4 00:51:31 2011
Legal or Illegal ... it just shows eBay/preypal's attitude towards sellers   . total control and lack of empathy ! Glad that I've moved on !
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Phil DeBasquet
       
Tue Jul 5 15:34:20 2011
PAYPAl has operated illegally from day one. The founder was a Russian crook and there has never been a bit of decency in that organization.
Of course the 21 day hold is illegal. They are licensed as a money transfer company. In most stated their licence has lapsed. No one sees to it they renew.  
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: zvicki
       
Tue Jul 5 15:52:32 2011
@Phil B. How would one do this? I would very much like to report this riducolous policy to my state, but have no idea how to go about it?

@David - Excellent letter!
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: andanotherthing
       
Wed Jul 6 08:40:21 2011
I think in the UK, under the Financial Services Act legislation, holding on to customer's funds in this way is illegal.  The first hint that Paypal is trying to do this in the UK on my accounts and I will contact the financial Services Ombudsman.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: reader0706
       
Wed Jul 6 09:07:27 2011
@zvicki
go to PayPal State Licenses page.

http://tinyurl.com/3apx79r

http://preview.tinyurl.
com/3apx79r

Look
up your state's license agreement (of one exists). If they are not following to a "T", regardless of whatever terms they try and make you agree to in the UA,
contact the overseeing body listed at the license page, along with appropriate agencies in California and Nebraska, along with the ftc complaintassist.gov site.

Most states require the funds to be available within 10 days.

Since paypal has (oftentime unexplained or unexplainable) conditions for holding and release of the funds, they are in practice and in fact operating an escrow service.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: craftsheaven
       
Sun Jul 10 04:26:12 2011
Yes, PP acts illegally because it can.  21 day hold?  PP held funds of mine in 2 disputes - one for 6 months and another for 7 months and then charged me a "$20 dispute fee" defined as a usury rate had PP been appropriately defined by the Feds as a bank.
I filed formal complaints about this and other unregulated PP usury rate fees.  All PP acct holders need to put pressure on the Feds to define PP as a bank and regulate them as a bank.
They would then be subject to the new banking consumer laws.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: slightly off tipic
       
Sun Jul 10 13:40:14 2011
Just a heads up here. Paypal UK twitter account has been hacked for the second time in one week.

Some real security professionals, eh?
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: James
       
Fri Jul 15 08:00:13 2011
Dear Ina.

I just came across this article today after having experienced the payment hold with PayPal and I would like to comment on what is really happening, contrary to what you've been told by Ebay and PayPal officials.

My Bio:

I've been a small business selling on Ebay for over 10 years. Have a 100% feedback and not one legitimate claim ever filed against me by a buyer. I've always used Paypal until recently when I discovered that they started withholding my funds for up 21 days.

Contrary to what I've read in your article Ebay and PayPal have selectively "Blacklisted" sellers, even good sellers with an impeccable 100% feedback rating.

Here are some excuses I've been told in actual phone calls to customer service representatives at PayPal about why my monies are pending.

Call 1. If I were a verified seller, meaning if I gave them My back account, I wouldn't have money holds. So I verified giving them my bank account and my money was not released and was still on their hold status.

Call 2. This representative said being verified has nothing to do with it and that my money was being held "for my protection" in case someone is dissatisfied with my product (I sell manuals manuals, books) I don't need their protection, if someone ever files a claim against me I'll deal with it when it happens.

Call 3. This representative told me that money can't be released until it is verified that my product gets to them. Since when does Paypal sit down and check everyone's delivery status. I know of sellers with ratings like mine that never get a delivery confirmation and their money is released as soon as it is received by PayPal.

Call 4. This representative will check into it and get back to me. Frankly, they never call back. They send out a form letter stating where you can go on the Paypal site to get questions answered.

Ina, the information we get from PayPal representatives are not only made-up excuses but lies. This goes for their officials as well. When I read what they told you were there formula was for determining their holds status I was shocked and outraged by the lie.

It has really cost me too much time to watch my money with PayPal and they are killing off lots of good sellers with 100% feedback ratings. It's sad to see this now and as soon as all my funds clear I'll be quitting PayPal along with many others.

Your comments are welcome here.

Warmest Regards,

Jim Vos
JEI Turbine Group
Montgomery, TX USA

Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Carolyn
       
Wed Aug 31 13:54:02 2011
paypal & ebay are getting more and more redicules. I just want to sell my items.  I am sick & tired of their new rules for my protection.  I am so angry that for no good reason, they are holding my funds for 21 days. It is a big hassle to pay extra for a tracking # and then watch to see when it is delivered and then call them and wait forever on the phone to tell them, getting someone who is in another country and then being told it will be released in 3 days. It is NOT their money, they have no right to withhold it when I need the money for shipping and purchasing and bills. Someone needs to regulate these maniacs. I can't stand anymore RULES!!!!!!!!!!!!!!
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Texan
       
Fri Sep 2 22:45:37 2011
I just started selling a few months ago on ebay, mostly as a house cleaning.  In spite of having 100% positive feedback and having had no buyers file disputes against me, PayPal just put the 21 day hold on my account.  For the type of small items that I sell- very often <$5 with $1.80 shipping- the additional expense of tracking isn't necessary and it's easier for me to purchase the stamps at the USPS than online through ebay.  These also tend to be items that wouldn't fit as Craig's list or Etsy items.  A one day yard sale isn't practical for a renter.  So Ebay is basically the only game in town for me unless I want to throw these items in the GoodWill and get nothing for them at all.  Therefore it doesn't matter if Ebay takes an outrageous cut and Paypal has some sleazy practices.  I can boycott them, but it only hurts me not them, unfortunately.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Former Ebayer
       
Thu Oct 13 18:34:42 2011
They put a hold on my account because I had a couple of transactions outside of my normal light activity and they said they were putting a hold.  It should be illegal.  A bank can clear funds overnight.  PayPal is just plain greedy.  Anyway, I filed a complaint with the BBB and I wrote to my Senator.  Maybe if a lot of noise is made, something will get done.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Sue
       
Thu Oct 13 21:41:10 2011
If you put a tracking number on your item and it's confirmed as delivered your funds are released within 3 days from when the item was delivered. if you mark the item as shipped it's 7 days. Maybe you should try doing this and the money will clear faster-it's 21 days OR sooner.

I'm not happy either but I'm willing to pay the extra money for delivery confirmation so I get my money quicker.
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Tootsie
       
Sun Oct 16 09:30:19 2011
Puspal can stick it where the sun don't shine!  They have a monopoly and can do exactly as they please.  I will write to our Attorney General and file a complaint against them and their illegal and immoral practices.  They should be boycotted by everyone!!
Is eBay's 21-Day Hold on PayPal Accounts Legal?   Is eBay's 21-Day Hold on PayPal Accounts Legal?
by: Boghy
       
Tue Oct 18 00:43:48 2011
Wanna know the most ridiculous story about this 21 day hold on PalPal? READ MY STORY:
I'm an ebay seller/buyer since 2005 with perfect 100% feedback no negative or neutral comments about my transactions whatsoever.
While i can withdraw from my paypal account unlimited amount of money, i sold an expansive item for ove $5,000 six months ago, i got my money the buyer left me a good feedback - all good. One month ago i sold two smart phones for $300 each, again got my money transfered from paypal all good - no problems.
A week ago i purchase two items for $10 each from ebay, got a $1.50 partial refund - and BANG - PAYPAL PUT MY ACCOUNT ON HOLD 21 DAYS. Now how in the hell can someone explain that? Called paypal and one guy was such an idiot that he start reading the holding policy - for sellers point - so i asked - do you guys have a such policy for buyers? The guy said - NO - well then what's the reason why my account is on hold for 221 days? I DON'T KNOW - he said. Realizing that the guy had no clue on what to tell me, i opened a complain online - no answer. I called again, got another guy - same bullshit.
So, the moral of the story is - if you have a PayPal account, no matter what feedback you have on ebay - no matter if you buy or sell - PAYPAL WILL FUCK YOU sooner or later!
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