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EcommerceBytes-NewsFlash, Number 2131 - October 06, 2009 - ISSN 1539-5065    2 of 4

PayPal Expands Ability to Place Temporary Holds on eBay Transactions

By Ina Steiner
October 06, 2009

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PayPal recently notified customers of policy changes in its Terms of Service (TOS). Beginning October 14, 2009 the PayPal Acceptable Use Policy is being amended in Section 3 (c) to add the purchase of real property as a prohibited activity. According to the announcement:

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. The new language will read: 1. "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."

The company also amended the PayPal Student Account Agreement, also effective October 14, 2009, to allow the child to add a bank account to his or her PayPal Student Account. "The parent may set Permissions to allow or prevent the Child from linking a bank account to the Student Account and from adding funds from the linked bank account to the Student Account Balance."

The Electronic Frontier Foundation tracks changes to corporate user agreements, the full list of PayPal changes to its Terms of Service can be viewed on this page.

PayPal recently received negative press that accused the company of failing to communicate to users fee changes (link).

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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