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

Smiler2788

Who is regulating these sharks then?

Undervalued

Smiler2788 said:

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???

Whilst, up to a point, I understand your frustration I strongly suspect PayPal are operating in accordance with the terms and conditions you agreed to when you signed up.

Even if they are not, which is unlikely, your actual loss in all this is the cost of borrowing £3K for six months. If they are in the wrong and you eventually win a claim you will still be expected to have taken reasonable steps to mitigate your losses. That would most likely be by borrowing the money, as cheaply as reasonably possible. Even if you have to pay 10% interest that is only £150.

So unless that is impossible for you, in which case your business has far deeper problems, surely that is the thing to do. Then, by all means file a complaint with the FOS, which as a small business will cost you nothing, and if you win you will get your costs back and possibly a little for the inconvenience. If you go down the small claims court route you will be risking the fees which you will have to pay up front and will only get back if you win.

As has been said, neither will be resolved within six months. No amount of ranting about "sharks" will change that. 

onomatopoeia99

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.

Six month LIBOR is 0.16% at the moment, so they'd be getting £2.40 on £3,000, which isn't even enough for a pint, except perhaps in a 'spoons.

ItsComingRome

Smiler2788 said:

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???

And the cost of dealing with all the cheesed off customers likely far exceeds any amount they could earn investing this, and that's before you even start thinking about FOS bills for £550 a pop.

TripleH

It doesn't matter how long you have traded sadly. No competent money launderer is going to open an account from day one and start cleaning their cash. The problem is that it most likely won't be you but someone who buys /sells to you in a legitimate transaction from an account under suspicion that triggers it all.

At the end of the day PayPal would rather hold £3k of your funds (and loose your custom) whilst they verify that you are completely clean than not investigate and risk heavy fines and criminal charges if it is proven you were doing something suspect.

Remember online transactions are still a 'new way of doing business' and limited competition does not incentivise companies like PayPal doing this in less time.

Their view is you need them more than they need you.

Smiler2788

Yeah but we don't need them there just one of the many payment options for an ecom store these days,  won't use them again as 1000s of other small businesses are also saying. 
They finally released our money this week after the financial ombudsman started the investigation... how many experts on here said that wouldn't help 🤔 

ItsComingRome

Smiler2788 said:

Yeah but we don't need them there just one of the many payment options for an ecom store these days,  won't use them again as 1000s of other small businesses are also saying. 
They finally released our money this week after the financial ombudsman started the investigation... how many experts on here said that wouldn't help 🤔 

The FOS in no way started an investigation this week.  They're absolutely snowed under with complaints.

Sounds more like they are satisfied you're not doing anything untoward.  A month is a fairly typical timescale for an AML/anti-fraud investigation.

Undervalued

ItsComingRome said:

Smiler2788 said:

Yeah but we don't need them there just one of the many payment options for an ecom store these days,  won't use them again as 1000s of other small businesses are also saying. 
They finally released our money this week after the financial ombudsman started the investigation... how many experts on here said that wouldn't help 🤔 

The FOS in no way started an investigation this week.  They're absolutely snowed under with complaints.

Sounds more like they are satisfied you're not doing anything untoward.  A month is a fairly typical timescale for an AML/anti-fraud investigation.

Indeed.

I am not sure at what point PayPal would become liable for the FOS fee of £550 (?). I am out of date but it may be that they get one opportunity to settle in full rather than having to accept the investigation fee? As you say any actual FOS involvement beyond that would be many months down the line.

ItsComingRome

Undervalued said:

ItsComingRome said:

Smiler2788 said:

Yeah but we don't need them there just one of the many payment options for an ecom store these days,  won't use them again as 1000s of other small businesses are also saying. 
They finally released our money this week after the financial ombudsman started the investigation... how many experts on here said that wouldn't help 🤔 

The FOS in no way started an investigation this week.  They're absolutely snowed under with complaints.

Sounds more like they are satisfied you're not doing anything untoward.  A month is a fairly typical timescale for an AML/anti-fraud investigation.

Indeed.

I am not sure at what point PayPal would become liable for the FOS fee of £550 (?). I am out of date but it may be that they get one opportunity to settle in full rather than having to accept the investigation fee? As you say any actual FOS involvement beyond that would be many months down the line.

Even then, looking through the previous FOS decisions regarding PayPal funds hold, they've consistently said that the T&C's allow it and they won't stick their noses in PayPal's business regarding this.  They're not afraid of the FOS in this instance so there is no way they got scared and refunded the OP.

born_again

So OP posted 10-08-21 stating the PP had held funds for 3 weeks. So lets say that is 20-07-21


Then says >>>They do it to 10s of 1000s of small businesses to make money pooling all that together for 6 months<<<

Op now said. 24-08-21 money released this week...

Are we stuck in a space time loop where 6 months becomes 1 month... 🤦‍♀️🤣