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Seller Sues eBay for Alleged ‘Buyer Always Wins’ Policy

An eBay seller filed a class action lawsuit against eBay and PayPal for, among other things, Breach of Contract and Unfair Business Practices, alleging that eBay has created a “buyer always wins” policy to the detriment of sellers, and touching upon several eBay and PayPal practices that are commonly criticized by sellers.

The lawsuit alleges eBay fails to refund 100 percent of sellers’ fees when a transaction is not completed, and alleges that PayPal deprives sellers access to their money by placing 21-day holds and reserves on sellers funds.

The lawsuit also alleges that eBay forces buyers to bring their disputes with sellers into the eBay Resolution Center rather than allowing the buyer to settle his or her dispute directly with the seller, and it alleges that this practice adversely affects sellers’ Detailed Seller Ratings.

Buyer Always Wins in Disputes? 
Maggie Campbell sells bicycles and bicycle parts on eBay, according to her lawsuit, and has entered into approximately 4,500 legally binding contracts with buyers since 2007.

Campbell alleges that under eBay’s Buyer Protection Policy, the company is required to consider documentation provided by seller that show when a buyer’s claim has no merit. “However, in these Buyer Protection Policy claims that are filed by buyers, Defendant eBay, Inc. has breached its User Agreement with the Plaintiff (and class) by refusing to consider documentation provided by the Plaintiff showing that buyers’ claims are without merit.”

The lawsuit alleges that eBay has established a policy in deciding these buyers’ claims that the buyer is always right. “The decisions made by eBay in the resolution center always favor the buyer. eBay does not and will not review the facts of the case to arrive at a fair resolution of the dispute between the buyer and the seller,” the lawsuit alleges, which continues:

“During the past 4 years, there have been in excess of 130 occasions wherein Plaintiff was damaged as a result of eBay enforcing its “Buyer Always Wins” policy.”

Campbell alleges eBay forces buyers to bring disputes with the seller into eBay’s Resolution Center rather than allowing the buyer to settle his or her dispute directly with the seller.

“Defendant eBay Inc. does not want buyers talking to sellers, and vice versa,” according to the complaint.

eBay Fails to Refund All Commission Fees for Rescinded Sales? 
The lawsuit also alleges that eBay fails to credit back to sellers Final Value Fees when sales are rescinded. “In the past 3 years, there have been many rescinded sales transactions in which Defendant eBay, Inc. has failed and refused to credit back to the Plaintiff (and class) the Final Value Fees that were associated with the rescinded sales.”

In addition, Campbell alleges that eBay has “nixed” international sales by refusing to allow international buyers to pay for her items through PayPal, and claimed that on at least 45 occasions over the last 2 years, eBay failed to reimburse her for Final Value Fees where it caused her sales agreements with her buyers to be rescinded.

Campbell filed her fourth amended complaint on August 20, 2014.

Hat tip to CourthouseNews.com for its August 13th article about the case.

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Ina Steiner
Ina Steiner
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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.