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    • R Jones
    • By R Jones 11th Apr 18, 6:55 PM
    • 4Posts
    • 0Thanks
    R Jones
    PayPal limitation
    • #1
    • 11th Apr 18, 6:55 PM
    PayPal limitation 11th Apr 18 at 6:55 PM
    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.
Page 1
    • marliepanda
    • By marliepanda 11th Apr 18, 6:58 PM
    • 5,465 Posts
    • 11,331 Thanks
    marliepanda
    • #2
    • 11th Apr 18, 6:58 PM
    • #2
    • 11th Apr 18, 6:58 PM
    How many purchases and how many claims?
    • bris
    • By bris 11th Apr 18, 7:04 PM
    • 7,527 Posts
    • 6,538 Thanks
    bris
    • #3
    • 11th Apr 18, 7:04 PM
    • #3
    • 11th Apr 18, 7:04 PM
    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.
    • R Jones
    • By R Jones 11th Apr 18, 7:12 PM
    • 4 Posts
    • 0 Thanks
    R Jones
    • #4
    • 11th Apr 18, 7:12 PM
    • #4
    • 11th Apr 18, 7:12 PM
    How many purchases and how many claims?
    Originally posted by marliepanda
    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.
    • R Jones
    • By R Jones 11th Apr 18, 7:14 PM
    • 4 Posts
    • 0 Thanks
    R Jones
    • #5
    • 11th Apr 18, 7:14 PM
    • #5
    • 11th Apr 18, 7:14 PM
    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.
    Originally posted by bris
    Please note, that these claims were made by us, not against us, as the items were not as described, counterfeit, or never turned up.
    • BorisThomson
    • By BorisThomson 11th Apr 18, 7:14 PM
    • 1,489 Posts
    • 3,142 Thanks
    BorisThomson
    • #6
    • 11th Apr 18, 7:14 PM
    • #6
    • 11th Apr 18, 7:14 PM
    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.
    Originally posted by R Jones
    That's over 5%, you can understand why it would raise concerns. What are the reasons for these claims?
    • marliepanda
    • By marliepanda 11th Apr 18, 7:17 PM
    • 5,465 Posts
    • 11,331 Thanks
    marliepanda
    • #7
    • 11th Apr 18, 7:17 PM
    • #7
    • 11th Apr 18, 7:17 PM
    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.
    • R Jones
    • By R Jones 11th Apr 18, 7:20 PM
    • 4 Posts
    • 0 Thanks
    R Jones
    • #8
    • 11th Apr 18, 7:20 PM
    • #8
    • 11th Apr 18, 7:20 PM
    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.
    Originally posted by marliepanda
    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
    • AndyMc.....
    • By AndyMc..... 11th Apr 18, 7:23 PM
    • 1,207 Posts
    • 827 Thanks
    AndyMc.....
    • #9
    • 11th Apr 18, 7:23 PM
    • #9
    • 11th Apr 18, 7:23 PM
    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
    Originally posted by R Jones
    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.
    • Gavin83
    • By Gavin83 11th Apr 18, 9:24 PM
    • 5,031 Posts
    • 8,122 Thanks
    Gavin83
    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.
    • theonlywayisup
    • By theonlywayisup 11th Apr 18, 9:51 PM
    • 12,145 Posts
    • 8,216 Thanks
    theonlywayisup
    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
    Originally posted by R Jones
    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.
    • bris
    • By bris 12th Apr 18, 12:04 AM
    • 7,527 Posts
    • 6,538 Thanks
    bris
    Please note, that these claims were made by us, not against us, as the items were not as described, counterfeit, or never turned up.
    Originally posted by R Jones
    Ok I took it as the other way round.


    This is even worse, you are a serial returner/claimer, this puts you high on their hit list. You claims ratio is very high, innocent or not it looks extremely dodgy to them.
    • askmeaboutsofas
    • By askmeaboutsofas 12th Apr 18, 1:44 PM
    • 58 Posts
    • 51 Thanks
    askmeaboutsofas
    That is a high rate of complaints. It's not that PayPal have decided that you're committing fraud, but that you're too high risk and essentially you're costing them too much money. Every case you open costs them at the very least the wages of the people who have to deal with the issue, and they're well within their rights to limit the amount of money they are prepared to spend on any one account.
    Is your account limited in the amount you can buy or sell, or are you just no longer able to open cases? Can you continue to use your PayPal account to receive money from your own customers, and instead use another method to pay for your goods? Keep in mind PayPal can be quite ingenious at tracking people, so if you open another account in another name or at another address they may still figure out that it is yours.
    Buying designer goods that are cheaply priced on gumtree or eBay (or other places like that) is risky. As a business, that risk should be yours - not PayPal's. If you switch to using a credit card you will eventually run afoul of your bank for the same reasons.
    Best advice would be to make some changes to your business. Find another source for your stock, be more diligent in checking whether goods are genuine, or be prepared to write off as a loss that 5-6% of purchases that are duff.
    If your business grows large enough, you too may one day have to "fire" a customer who is costing you too much money through no real fault of their own.
    • Ectophile
    • By Ectophile 12th Apr 18, 7:04 PM
    • 3,060 Posts
    • 1,940 Thanks
    Ectophile
    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.
    Originally posted by AndyMc.....
    But given that PayPal drew up the terms of the contract, the odds of the customer winning are pretty slim.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
    • AndyMc.....
    • By AndyMc..... 12th Apr 18, 7:54 PM
    • 1,207 Posts
    • 827 Thanks
    AndyMc.....
    But given that PayPal drew up the terms of the contract, the odds of the customer winning are pretty slim.
    Originally posted by Ectophile
    Correct, but a business to business transaction will have no chance quoting consumer rights.
    • hollydays
    • By hollydays 12th Apr 18, 9:17 PM
    • 15,956 Posts
    • 11,988 Thanks
    hollydays
    The goods were not Chinese by any chance?
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