The end of PayPal holds & account freezes is nigh
“If anything, please know that I’m now going to use your story to radically change how we deal with holds, and communicate with our customers. I’m driving a lot of changes at PayPal (I took over 5 months ago), and I hope that over time we will earn your trust again. Not with words, but with delightful products, and amazing service”
- David Marcus, President, PayPal
These are the words of the President of PayPal who’s only been in office since the end of March this year. He was writing personally to a disgruntled PayPal customer who had over £40,000 frozen in their PayPal accounts.
It gets even better than that though, TNW reports an email sent out to multiple PayPal users who apparently have “above-standard performance” (Tamebay don’t know how performance is measured) saying “we want to share some good news with you. Due to your feedback and outstanding account performance, PayPal will no longer temporarily hold your funds in the event of a dispute, claim, or chargeback. These processes used to require funds to be held in a pending balance while the outcome was determined. Going forward, your funds will not be held in a pending balance“.
The biggest issue most users have with PayPal isn’t chargebacks, reversals, security – all business have these issues to deal with. The simple fact is that you either accept you’ll occasionally lose a parcel, or you ship everything tracked and win every seller protection case opened against you. The big issue is when PayPal freeze your account, put a rolling 90 hold on your account, or put a temporary hold on your funds.
Whilst we don’t know how many users the hold free promise applies to, or how quickly it might be rolled out internationally, it’s welcome news that PayPal are at last looking at the issues from their merchants perspective.
David Marcus may only have been in the job five months, but he gets a huge vote of confidence from Tamebay. Forget the empty promises from the past, this man appears to be on our wavelength, understands our problems and actually appears to be putting our interests first.
Tony says
12:07 pm on 14/09/2012
The PayPal/eBay unholy alliance has been a thorn in sellers’ flesh for so long now, it’s hard not to be cynical about this. As far as I know, PayPal are not subject to the same banking controls as other financial institutions; imo this is why they have based it in Luxembourg, so that UK complainants cannot have any leverage via the Banking Ombudsman. Basically they can do what they like with your money; they have a cornered market as near as damn it, and they know it. Let’s hope, then, that this bloke is as good as he says he is. I will not be holding my breath, though!
JD says
6:20 pm on September 14th, 2012
I have posted this before and is my understanding of the Regulatory position of PayPal in the UK. You will see that you are able to use the UK Financial Ombudsman Service.
In March 2007 PayPal was granted a banking license for the European Union by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg.
They are regulated by the CSSF and this should link to their (English) form for sending a complaint by email:
http://www.cssf.lu/en/top/contact/
On 2nd July 2007, after PayPal became licensed as a Bank in Luxembourg, they signed up with the UK Financial Ombudsman Service to join their voluntary jurisdiction by contractual agreement. They were not required by law to join the voluntary jurisdiction, but in doing so they formally agreed to deal with complaints – and comply with FOS decisions – in the same way as institutions under compulsory jurisdiction.
This is a link to the FOS complaints procedure:
http://www.financial-ombudsman.org.uk/consumer/complaints.htm
(If you search in the PayPal user agreement you will find much the same thing under ‘Resolving Disputes’)
Tony says
7:08 pm on September 14th, 2012
JD – thank you so much for that, it is most enlightening and I stand corrected on the ombudsman/regulatory issue. And it makes me feel a lot better.
On the eBay/PayPal ‘unholy alliance’, though, I still hold my ground. But that’s not really relevant for this thread…..
Tony says
7:30 am on September 15th, 2012
Actually having read Mr. Marcus’s email to that disgruntled customer, I would love it if that customer (Mr. McMillan) had released Mr. Marcus’s mobile number to the public….
He’d have changed it immediately, of course, but still….
David says
6:12 pm on September 16th, 2012
I currently have an ombudsman case against paypal open after they changed to the fast withdrawals and a snag meant that any attempted withdrawal to my bank was bounced straight.
Each complaint made costs them £380 regardless.
Kathi says
2:25 pm on 14/09/2012
Tamebay, you’re drinking the Kool-Aid by the gallon. This guy was put into his position by people who hate their own customers, and he’s not going to change anything.
One message to someone Paypal ripped off who has the means to sue and attract a lot of negative publicity just as the Christmas season is getting started, and you think the whole company has changed? I say you’re gullible.
Paypal is making a fortune on the interest on these holds. Until some country grows a spine and starts regulating Paypal, they’ll continue to steal from their customers.
Chris Dawson says
3:08 pm on September 14th, 2012
Perhaps you should start a petition and ask PayPal not to listen to their customers and not to bother making PayPal a better place to do business? Tell them it doesn’t matter how punitive PayPal holds have been in the past but you’d rather they kept them than believe the company might change.
Personally I’m not mad, I’ll welcome the improved service with open arms.
Tayyab Akhlaq says
2:27 pm on 14/09/2012
Many of our clients would be ecstatic if this comes through. Good news!