Paypal have frozen over £3000 of my company funds, small claims or statutory demand to get it?

Smiler2788

Hi Everyone

I hope im posting in the right section, i apologise if not.

Ok, so just over a year we have been processing maybe £100 K through paypal via our online store and the rest via card payment, out the blue 3 weeks ago they limited our acccount, on hindsight i should of disconnected the payment method when i thought they had, around the grand mark, next day was £3 k and i called to ask why?

Told it was a yearly security check will need to send in ID, i did that.

Next day called as no release, said oh now you need to print off and sign a letter of authority for all directors, just me, did that.

Next day called told it will take 3 to 5 days to check and money will be released.

3 weeks on countless calls told same thing there checking, from reading 1000s of bad reviews on trustpilot this is too common, and all done via faceless systems and my calls are a waste of time, it will now sit for 6 months while they get interest on the millions they hold like this!

Have sent OFFICIAL complaints via there internal message system and each time its the same auto reply, "we are pleaed you are satisified with the outcome" if need to take it further contact the financial ombudsman, i have now filed a claim with the ombudsman, not heard from anyone yet.

This is messing with my ability to buy stock, that was effectively cashflow in and out of paypal.

Im looking into small claims or a letter to belgium of a statutory demand?

Ps not one chargeback or similir in over a year with paypal!

Best Justin.

p3ncilsharpener

Smiler2788 said:

Hi Everyone

I hope im posting in the right section, i apologise if not.

Ok, so just over a year we have been processing maybe £100 K through paypal via our online store and the rest via card payment, out the blue 3 weeks ago they limited our acccount, on hindsight i should of disconnected the payment method when i thought they had, around the grand mark, next day was £3 k and i called to ask why?

Told it was a yearly security check will need to send in ID, i did that.

Next day called as no release, said oh now you need to print off and sign a letter of authority for all directors, just me, did that.

Next day called told it will take 3 to 5 days to check and money will be released.

3 weeks on countless calls told same thing there checking, from reading 1000s of bad reviews on trustpilot this is too common, and all done via faceless systems and my calls are a waste of time, it will now sit for 6 months while they get interest on the millions they hold like this!

Have sent OFFICIAL complaints via there internal message system and each time its the same auto reply, "we are pleaed you are satisified with the outcome" if need to take it further contact the financial ombudsman, i have now filed a claim with the ombudsman, not heard from anyone yet.

This is messing with my ability to buy stock, that was effectively cashflow in and out of paypal.

Im looking into small claims or a letter to belgium of a statutory demand?

Ps not one chargeback or similir in over a year with paypal!

Best Justin.

Neither, and the FOS won't be much use either.  You won't get in front of a judge or an Ombudsman decision in less time than they'll automatically release the funds back to you.

Edit to add:  If you look at past FOS decisions regarding PayPal holds they seem to agree that PayPal is within its rights to do this, so the FOS are unlikely to side with you. I expect a judge in the small claims court will side with them too, you are a business and are expected to understand what you're signing up to.  PayPal has terms allowing them to place holds on funds where it feels there is a risk.  You'll just have to wait for 6 months until they release your funds.

And one more edit:  Just to briefly talk about the idea that they're making millions in interest off this.  The interest you can earn on £3k in 6 months is a pittance, getting a 1% rate would net them the princely sum of £15.  Given how many phone calls and bits of paperwork you've already sent (not to mention potential FOS costs and employee costs dealing with the complaint if it got that far) you'll have cost them far more than £15 in wages alone dealing with this.  The idea that they're holding onto peoples money to cream off interest is a non-starter.

JJ_Egan

Is this not a business to business transaction anyway .

nyermen

Sadly they just have to say "AML checks" and the regulators will back down.
That said, on the "millions in interest" part - paypal's treasury dept will have wider access to financial products than just a 1% rate, particularly if they are doing proper liquidity management, they could invest longer term, no idea what they could get though, eg on the Money Markets.

p3ncilsharpener

nyermen said:

Sadly they just have to say "AML checks" and the regulators will back down.
That said, on the "millions in interest" part - paypal's treasury dept will have wider access to financial products than just a 1% rate, particularly if they are doing proper liquidity management, they could invest longer term, no idea what they could get though, eg on the Money Markets.

6 months isn't exactly "longer-term" though.  I doubt they'd get a reasonable return vs the potentially hundreds to thousands it'll cost them dealing with a complaint and potentially an FOS complaint too.

Smiler2788

So a Statutory demand would not help? i cant wait 6 months for them just being jerks, it is out of order they are a disgrace the way they use loopholes to get round uk regs oh and use virtual office ie law firms as there uk address, ironically what they say businesses must not use!

k3lvc

Smiler2788 said:

So a Statutory demand would not help? i cant wait 6 months for them just being jerks, it is out of order they are a disgrace the way they use loopholes to get round uk regs oh and use virtual office ie law firms as there uk address, ironically what they say businesses must not use!

Yet you were happy to put £100k+ through them ??

Hopefully you've a backup plan you can activate in your business plan ?

Smiler2788

Yes happy to put money through them and they take there commission, not to hold 3k to ransom unexpectedly, how is that normal business relationship to you?

ItsComingRome

Smiler2788 said:

Yes happy to put money through them and they take there commission, not to hold 3k to ransom unexpectedly, how is that normal business relationship to you?

It's very normal for merchant card service providers to place holds on funds if they're concerned about the transactions or the business is considered higher risk.  It's not something that's unique to PayPal.

Smiler2788

After a year of perfect transactions there is no reason for it,  they do it to 10s of 1000s of small businesses to make money pooling all that together for 6 months isn't as far fetched is it as above poster hinted, it's effectively locked away for 6 months, why they length???

KeithP

This is nothing to do with Consumer Rights.