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Fri Dec 3 2021 17:08:15

PayPal Won't Release Seller's Funds after 6-Month Hold

By: Reader

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Dear Ina,
I have an issue that seems to be a wide spread problem. PayPal froze my account, held the money for six months promising they would give it back and then kept the money claiming it was for "damages". Not one case has ever been opened against me. 

I found a community post with many people complaining PayPal also kept their money. It seems to be something they just started doing as of 2019. 

This has to be criminal no matter what fine print they use to justify it. They are keeping people's money to compensate themselves for imaginary damages. 

I'm filing a small claims suit against them. 

Here is the forum thread about it. There is an initial person complaining about this same problem. Then if you scroll through the comments lots of people who also are victims.
 
Sincerely,
A.

Comments (11) | Leave Comment | Permalink
Readers Comments

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: Silver Ice King This user has validated their user name.

Fri Dec 3 21:19:40 2021

What they are claiming is that you violated some of their policies and are basically claiming liquidated damages.  I do not know what your issues were with Paypal that caused them to freeze your account, but many of the Sellers in the Facebook sports cards groups were selling their cards and only accepting Friends and Family.  When Paypal finally cracked down on it there were a few that lost as much as $150K in liquidated damages because PayPal was not getting their 2.96% plus $0.30 and this was their way of not only collecting it but also charging penalties for doing so.  I know a few were contacting attorneys to try and fight it but am not sure if any of them have been successful or not.  Good luck with your fight and hope you get lucky and win.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: Opalie This user has validated their user name.

Fri Dec 3 23:59:32 2021

Then shouldn't their "damages" be limited to the calculated % plus .30 per transaction?

It appears that their damages "fines" are just being based on "whatever they have in their account".

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: 1st Armored Div. 1971-1973 This user has validated their user name.

Sat Dec 4 05:05:45 2021

Same thing happened to me. They are holding funds for "future" claims. But, I almost never use Paypal. I haven't sold anything using Paypal since June 2021.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: 1st Armored Div. 1971-1973 This user has validated their user name.

Sat Dec 4 05:08:54 2021

All these comments seem to be about sellers skirting the rules.

No skirting here.

I only used Paypal within their terms of service and yet one day they virtually stripped me of funds and put it on hold for future claims.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: hotelblueeast This user has validated their user name.

Sat Dec 4 05:36:42 2021

I actually have some experience handling situations such as this.  PayPal has actually always done this to a certain extent, but I noticed a surge in accounts being permanently limited both for AUP violations and other violations since 2020, which is around the time PayPal lost the eBay contract.  There are a number of different ways to handle this, and they all have some likelihood of success.

BBB complaint - I've noticed that filing a Better Business Bureau (BBB) complaint actually gets PayPal to (usually) give you an actual reason and other information about the limitation in their response to BBB complaints.  Since PayPal pays for its BBB rating, they are obligated to respond to these complaints.  I've seen accounts both get their money back and in some cases even be reinstated through these complaints.

CFPB complaint - you can file a complaint against PayPal with the Consumer and Financial Protection Bureau, and they will forward the complaint to PayPal and require a response from them within 15 days.  Most common complaints against PayPal that are covered by federal regulations are time limit and extent of investigation, reinvestigation requirements and other violations of the Electronic Funds Transfer Act.  The CFPB rules aren't too hard to navigate, and you should look over them before filing a complaint.  PayPal has more complaints by consumers filed against it with the CFPB than any other company in the US.

Arbitration - a mandatory arbitration clause is included in PayPal's TOS.  The process to resolve a dispute in this was is outlined in the terms of service, although customer service will never mention any of this.  First, you have to send a Notice of Dispute to PayPal (the form is on their website, just Google it) with tracking.  PayPal has 45 days to respond to this complaint.  Typically, you will be contacted by a law firm, not PayPal itself.  However, PayPal often chooses not to reply to AUP complaints at all.  If the complaint isn't resolved within 45 days, you can file arbitration with the AAA.  The upsides to arbitration are that it is fairly easy and it will cost PayPal a fortune.  If you take the case all the way to a decision, it will cost PayPal between 4000 and 5000 dollars.  Just filing a complaint against them costs them 500.  As per PayPal TOS, they are required to pay all of the costs of arbitration upfront.  The downsides are that it may require legal argument and is very, very slow.  Note:  The AAA's procedural rules allow either party to take a case to small claims court.  To prevent PayPal from having the case dismissed for this reason, you have to adjust the claim amount to over what your jurisdiction's limit for small claims court is, which is usually 5000.  

Actual litigation - under PayPal's TOS, you can elect to file a claim in small claims court instead of using arbitration.  However, your case and amount in dispute would have to fall under the purview of the jurisdiction of the small claims court.  What if you want to sue PayPal for more than allowed by small claims but don't want to arbitrate? Although PayPal has the binding arbitration agreement, federal courts have been willing to not enforce arbitration clauses, and some other clauses, if the misconduct at issue is intentional.  I think a lot of PayPal's misconduct would fit this definition.  If you want to file in state court, you will have to consult local laws.  

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

This user has validated their user name. by: The End

Sat Dec 4 17:31:23 2021

I told you :
NEVER EVER USE PAYPAL.
So,Stop complaining.
That means DON'T USE EBAY or the "Store Fronts" that funnel you in to PayPal.
Just DON'T.
No excuses.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

This user has validated their user name. by: The End

Sun Dec 5 12:45:13 2021

This would be a way to go :
https://resellingrevealed.com/can-you-sell-on-ebay-without-paypal
/
Until
I found out Ebay was taking 14% , I almost came back.
3% is plenty.
eCrater is really gaining.
I've had quite a few sales there since September....
In my experience (20 years) eCrater is the Diamond in the rough.
Pleasing to the eye and Easy to navigate.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: eBaySince2006 This user has validated their user name.

Sun Dec 5 15:06:35 2021

When I switched to eBay managed payments in July PayPal held $5700 for possible future chargebacks and they're refusing to release it. When I called them about it they said to "blame eBay and contact them." I guess they didn't learn their lesson last time they had the class action lawsuit for holding funds.  

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

by: BargainzBabylon This user has validated their user name.

Mon Dec 6 18:38:01 2021

Stuff sells on eCrater?  

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

This user has validated their user name. by: The End

Tue Dec 7 20:13:35 2021

Just racked up 2-- $200 sales today !
eCrater.

Perminate Link for PayPal Won't Release Seller's Funds after 6-Month   PayPal Won't Release Seller's Funds after 6-Month

This user has validated their user name. by: iheartjacksparrow

Wed Dec 8 11:30:13 2021

@BargainzBabylon - Yes, stuff sells on eCrater. I've been selling there exclusively since 2008, and I wouldn't have stayed if I wasn't getting sales.  



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