PayPal limitation
R_Jones
Posts: 4 Newbie
I received an email last Thursday informing us that my PayPal account had been ‘limited’ due a large number of claims. This was a shock as I was unaware that we were breaking the PayPal User Agreement. Apparently we had been sent an earlier email warning us of this, however I can honestly say I have no record of this! In order to try and reverse this decision, I spoke to a member of PayPals team, who asked us to provide some documents which we did. We tried to inform PayPal why we make claims and ensure them we are a legitimate reseller. However despite assurances from the agent that this issue could be resolved, I have now received another email saying that PayPal had stood by its decision to ‘limited’ our account, with no further explanation.
We are a small partnership who sell authentic secondhand designer clothes, shoes and accessories via platforms such as Instagram and Depop, and recently our own website. To ensure that we never buy an item that isn’t as described, counterfeit, not fit for use, or never turns up we use PayPal Goods & Services as we believed it provided us with both buyer and seller protection. From the records of transactions, you could see that we will always provide a valid reason for a claim, and we have only ever had 1 claim against us in over 220 sales, which we conceded was due to a postage problem.
I am very confused as to why our account has been suspended, as I can’t find any information about a limit that can be made on claims against items that are counterfeit, not as described, or fail to turn up. Our PayPal business account should protect us against fraudulent activities, and a consumer does hold the legal right to a refund under the Consumer Protection Act. I would understand why our account has been limited if these claims were not legitimate reasons to demand a refund, but these are all included in the PayPal examples of when to open a claim.
Upon receipt of the emails, I looked at the User Agreement (All 280 pages & 60,000 words) and draw the following to your attention, all of which I believe we comply with:
Section E 9.1 - states that a user will not provide false, inaccurate or misleading information, which is the only time we will claim, should the item arrive.
Section L 9.1 - states that a user must not conduct your business or use the services in a manner that results in or may result in complaints, disputes, claims, reversals, chargebacks, fees, fines, penalties and other liability to PayPal, a user, a third party or you, which is fair, but does not provide a definitive limit that should not be surpassed. Also, by claiming, we are using the service correctly and helps PayPal identify fraudulent sellers.
Section N 9.1 - states that users must not cause PayPal to receive a disproportionate number of claims that have been closed in favour of the claimant regarding your account or business, which suggests that if/when a buyer legitimately claims against an item more than once, and is granted the claim, this is a breach of the agreement, which contradicts the whole reason for the service.
We operate solely through PayPal Goods & Services across Instagram, Depop and our own website (which also uses PayPal G&S as the only payment method) to provide our customers with items we want them to be happy with. We originally started this small business as a Sixth Form project, which we enjoyed so much we decided to continue. I am unsure as to what other measures I should take to protect us against goods not meeting the standards, nor when I am able to claim. As students, we are devastated that our project has been cut short due to miscommunications, and was wondering what precautions I should have taken in order to prevent this happening.
Any help would be much appreciated. Thank you.
We are a small partnership who sell authentic secondhand designer clothes, shoes and accessories via platforms such as Instagram and Depop, and recently our own website. To ensure that we never buy an item that isn’t as described, counterfeit, not fit for use, or never turns up we use PayPal Goods & Services as we believed it provided us with both buyer and seller protection. From the records of transactions, you could see that we will always provide a valid reason for a claim, and we have only ever had 1 claim against us in over 220 sales, which we conceded was due to a postage problem.
I am very confused as to why our account has been suspended, as I can’t find any information about a limit that can be made on claims against items that are counterfeit, not as described, or fail to turn up. Our PayPal business account should protect us against fraudulent activities, and a consumer does hold the legal right to a refund under the Consumer Protection Act. I would understand why our account has been limited if these claims were not legitimate reasons to demand a refund, but these are all included in the PayPal examples of when to open a claim.
Upon receipt of the emails, I looked at the User Agreement (All 280 pages & 60,000 words) and draw the following to your attention, all of which I believe we comply with:
Section E 9.1 - states that a user will not provide false, inaccurate or misleading information, which is the only time we will claim, should the item arrive.
Section L 9.1 - states that a user must not conduct your business or use the services in a manner that results in or may result in complaints, disputes, claims, reversals, chargebacks, fees, fines, penalties and other liability to PayPal, a user, a third party or you, which is fair, but does not provide a definitive limit that should not be surpassed. Also, by claiming, we are using the service correctly and helps PayPal identify fraudulent sellers.
Section N 9.1 - states that users must not cause PayPal to receive a disproportionate number of claims that have been closed in favour of the claimant regarding your account or business, which suggests that if/when a buyer legitimately claims against an item more than once, and is granted the claim, this is a breach of the agreement, which contradicts the whole reason for the service.
We operate solely through PayPal Goods & Services across Instagram, Depop and our own website (which also uses PayPal G&S as the only payment method) to provide our customers with items we want them to be happy with. We originally started this small business as a Sixth Form project, which we enjoyed so much we decided to continue. I am unsure as to what other measures I should take to protect us against goods not meeting the standards, nor when I am able to claim. As students, we are devastated that our project has been cut short due to miscommunications, and was wondering what precautions I should have taken in order to prevent this happening.
Any help would be much appreciated. Thank you.
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Comments
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How many purchases and how many claims?0
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There is nothing you can do, Paypal are ruthless.
They see you as a bad business simply because too many people are making claims against you.
They will be spending more on dealing with your customers claims than they make from you, so you are bad for business.0 -
Thanks for your reply. Around 350 transactions and 20 claims. Hard to tell as we swapped from a personal account to a business one as we set up our website etc. We had 1 claim against us shortly after beginning trading, because I lost the receipt for the 1 item lost in shipping! All other claims have been granted in our favour, and have had legitimate reasons.marliepanda wrote: »How many purchases and how many claims?0 -
There is nothing you can do, Paypal are ruthless.
They see you as a bad business simply because too many people are making claims against you.
They will be spending more on dealing with your customers claims than they make from you, so you are bad for business.
Please note, that these claims were made by us, not against us, as the items were not as described, counterfeit, or never turned up.0 -
Thanks for your reply. Around 350 transactions and 20 claims. Hard to tell as we swapped from a personal account to a business one as we set up our website etc. We had 1 claim against us shortly after beginning trading, because I lost the receipt for the 1 item lost in shipping! All other claims have been granted in our favour, and have had legitimate reasons.
That's over 5%, you can understand why it would raise concerns. What are the reasons for these claims?0 -
The numbers are high enough for PayPal to look at your account and basically decide you are not doing your due diligence when buying if you are buying so many counterfeit items.
I!!!8217;ve been buying and selling various bits and bobs personally for years
Now, and only ever had one counterfeit item and to be honest, given the price, I kinda expected that.
As a business you are held to a higher standard.0 -
marliepanda wrote: »The numbers are high enough for PayPal to look at your account and basically decide you are not doing your due diligence when buying if you are buying so many counterfeit items.
I!!!8217;ve been buying and selling various bits and bobs personally for years
Now, and only ever had one counterfeit item and to be honest, given the price, I kinda expected that.
As a business you are held to a higher standard.
We claim against goods that aren't as described, counterfeit or do not turn up. One example I use is that when I look at buying an item, I can authenticate items using the labels as a huge tell, and ask the seller for photos before I purchase, several times, I have been sent photos of genuine items, and when the item turns up, it has a different label. So annoying! These sellers also have 5 star reviews, and operate on a platform that uses PayPal as a payment provider, so Im not too sure what else I can do. These items also have RRP's of £100's so I always use the G&S to protect me, as I am often pessimistic0 -
We claim against goods that aren't as described, counterfeit or do not turn up. One example I use is that when I look at buying an item, I can authenticate items using the labels as a huge tell, and ask the seller for photos before I purchase, several times, I have been sent photos of genuine items, and when the item turns up, it has a different label. So annoying! These sellers also have 5 star reviews, and operate on a platform that uses PayPal as a payment provider, so Im not too sure what else I can do
Given you’re a business you’ll have zero consumer rights. If PayPal won’t give in the only thing you can do is see them in court.0 -
PayPal have no obligation to keep you on as a customer and they can close your account for almost any reason. While this is unfortunate for you PayPal are known for this and certainly as a customer losing them money they've no incentive to keep you on.
I'd suggest you look for a different option to take payments.0 -
We claim against goods that aren't as described, counterfeit or do not turn up. One example I use is that when I look at buying an item, I can authenticate items using the labels as a huge tell, and ask the seller for photos before I purchase, several times, I have been sent photos of genuine items, and when the item turns up, it has a different label. So annoying! These sellers also have 5 star reviews, and operate on a platform that uses PayPal as a payment provider, so Im not too sure what else I can do. These items also have RRP's of £100's so I always use the G&S to protect me, as I am often pessimistic
Goodness. I have a few VAT registered companies which also trade on Amazon, Facebook and Ebay. We use Paypal and our percentages are less than 1% (for claims by and against us).
Unless I am mistaken it sounds like you are making the claims rather than being claimed against?
What is more worrying is that you seem to base authenticity on "5 star reviews [I'm guessing that's feedback/reviews on eBay]" and "uses Paypal as payment provider". None of these are pointers to authenticity.
I don't quite understand where you are buying from, but as a business if you are buying from photos rather than a listing/advert and relying on emailed photos then you are failing at a fundamentally basic level.0
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