PayPal Problems

Paypalproblems

Not sure if this is the best place to post but as PayPal is a bank registered as a bank in Luxembourg it might be worthwhile.

Some background: I used to run a business a few years ago and occasionally took PayPal payments from customers in the US. I wound down the business in 2008-9 due to the recession and occasionally made small transactions spending my remaining balance.

Recently though I started an eBay business and did approximately £600 of transactions in 1 month, when I tried to transfer £78 out of my PayPal account into my bank account to pay my eBay fees the account was suddenly limited and the transaction reversed.

When I next logged in I saw the following message:[FONT=&quot]

[/FONT]Why is my account access limited?
Your account access has been limited for the following reason(s):
25 Jul 2010: Our system found unusual activity associated with your PayPal and eBay accounts that present a potential high risk
(Your case ID for this reason is PP-xxx-xxx-xxx-xxx.)





To remove the limitation they asked me to send proof of id, proof of address and proof of shipping/delivery.

I sent a scan of my Passport, Council Tax bill and gave the Royal Mail special delivery tracking numbers, this was all accepted.

The next day I got an email telling me my appeal was denied and I would have to wait 180 days to recieve my funds.

I tried customer services and they basically said tough we can do this as its in ours terms and conditions.

When I complained I got the following email response:

Thank you for contacting PayPal.

I checked your account and the Account Review Department has reviewed your documents and has decided to permanently limit your account due to the risk involved with your activities.

The decision is final and we will not be re-opening your PayPal account.

The outstanding £xxx.xx in your PayPal balance will be held for 180 days in order to minimise chargeback risks. Any Buyer Complaints or chargeback received against your account during this time will be paid from your account balance.

After 180 days, you can withdraw the funds from your account. You may also request a wire transfer for the outstanding balance on your PayPal account.

Thank you for choosing PayPal.



As a side effect of this my eBay account is also limited so its put a stop to my trading activities.


What I find most frustrating is that my buyers signed for the items which were delivered to their registered PayPal addresses and left positive feedback (which released the payments from their 21 day hold).


What I want to know is can a bank do this? Does the fact that my contract for the goods were with the buyer and not with PayPal have any bearing on the legality of holding my funds?


Could I take this to the FOS or Small Claims court? Are PayPal's terms and conditions unfair?

pcombo

Contact financial service ombudsman if you have any money in the account, May take 8 weeks to deal with but it is better than the 180 days paypal is given.

darkblue_2

Thank you for choosing PayPal.

Had to laugh at that.

They're based in Luxenbourg, so the jurisdiction is difficult.

We may close, suspend, or limit your access to your Account or our Services, and/or limit access to your funds for up to 180 Days if you violate this Agreement including the PayPal Acceptable Use Policy, or any other agreement you enter into with PayPal.

From their T&Cs.

It's pretty commonplace. They're not very switched on.

To be honest, you can send letters, phone etc until you're blue in the face, but it's likely you'll have to wait the 180 days.
Sorry to be the bearer of bad news.

Paypalproblems

pcombo wrote: »

Contact financial service ombudsman if you have any money in the account, May take 8 weeks to deal with but it is better than the 180 days paypal is given.

Due to the "21 day payment hold" for new sellers means all the funds from my transactions are stuck in the account.

Holds were lifted after I recieved positive feedback but that occurred after PayPal had limited my account.

So down on the shipping costs and on the 5th of August I will be invoiced for my eBay fees.

Paypalproblems

darkblue wrote: »

Had to laugh at that.

They're based in Luxenbourg, so the jurisdiction is difficult.


From their T&Cs.

It's pretty commonplace. They're not very switched on.

To be honest, you can send letters, phone etc until you're blue in the face, but it's likely you'll have to wait the 180 days.
Sorry to be the bearer of bad news.

They also appeared to be registered in the UK.

Name & Registered Office:
PAYPAL (EUROPE) LTD
WHITTAKER HOUSE
WHITTAKER AVENUE
RICHMOND
SURREY
TW9 1EH
Company No. 04056498

Name & Registered Office:
PAYPAL (UK) LIMITED
WHITTAKER HOUSE
WHITTAKER AVENUE
RICHMOND
SURREY
TW9 1EH
Company No. 05468033

I would assume though as a european bank they would also be subject to EU laws? As they also operate in this country wouldn't UK law also apply?

darkblue_2

Commencing 2 July 2007, as PayPal (Europe) S.à r.l. & Cie, S.C.A., PayPal moved its European operations from the UK to Luxembourg. As a Luxembourg entity, it is since regulated as a bank by the Commission de Surveillance du Secteur Financier (CSSF) and provides PayPal service throughout the European Union.

From Wiki

Press Releases from PayPal UK Limited. ONLINE DRIVES RECOVERY FOR BRITISH RETAIL SECTOR,

Same name - different company.

PayPal (Europe) S.à r.l. & Cie, S.C.A. (R.C.S. Luxembourg B 118 349) is duly licensed as a Luxembourg credit institution in the sense of Article 2 of the law of 5 April 1993 on the financial sector as amended (the “Law”) and is under the prudential supervision of the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier.

https://cms.paypal.com/uk/cgi-bin/?&cmd=_render-content&content_ID=ua/UserAgreement_full&locale.x=en_GB

Paypalproblems

I also saw this:

14.3 Governing Law and Jurisdiction. This Agreement and the relationship between us shall be governed by English law. For complaints that cannot be resolved otherwise, you submit to the non-exclusive jurisdiction of the English courts arising out of or relating to this Agreement or the provision of our Services without prejudice to your right to also initiate a proceeding against PayPal in that context before the competent courts of and in Luxembourg. In simple terms, “nonexclusive jurisdiction of the English courts” means that if you were able to bring a claim arising from this Agreement against us in Court, an acceptable court would be a court located in England, but you may also elect to bring a claim in the court of another country instead. English law will apply in all cases.

darkblue_2

Well spotted. You could file a case online with Money Claim Online (MCOL) internet service.
https://www.moneyclaim.gov.uk/web/mcol/welcome

glider3560

As they are regulated in Europe, PayPal (Europe) Sarl et Cie SCA will automatically be regulated by the Financial Services Authority (under the Passport scheme) when they do business in the UK. In fact, they are on the FSA Register for this purpose: http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=189419

This means you can complain to the FOS as they are regulated in this country.