Watchdog: PayPal holding customer’s money

By Chris Dawson May 15, 2013 - 7:19 pm

WatchdogTonight’s Watchdog looked at PayPal and claims that they hold on to customer’s money putting businesses and jobs at risk.

PayPal claims it’s system is quicker and safer than using a credit card, but is it too secure? Watchdog says “Yes” on behalf of those who’s funds have been put on hold and frozen out of their accounts.

Lawrence’s account was featured on the program when his first sale was his girlfriends pair of shoes which sold for 99p. Even after sending proof of his ID PayPal considered his account as high risk and permanently limited it.

Another customer was Tim Rogers, a supplier of portaloos for festivals. Each year when he gets a spike in trade during the festival season PayPal investigate his account and this year they froze 100% of his funds – some £33k.

According to customers that contacted Watchdog once PayPal freeze an account it’s impossible to talk to them and get some sensible decisions. Peter Cox complains of a feeling of helplessness that his legitimate business was pushed to the bring of bankruptcy trying to get his account unfrozen. He sent some 27 files to PayPal including everything from suppliers, invoices, identification, utility bills… the list was almost endless.

PayPal has told Watchdog that they work hard to make things easy for clients and they’re committed to getting better. In recent months they say that they’ve significantly reduced the number of UK accounts that are limited.

Peter and Tim are now back trading at full strength.

Whilst Watchdog have undoubtedly been contacted by some of the worst mis-judgements by PayPal, in reality they’re few and far between. There are millions of PayPal accounts never been limited and the few that have generally shout loudest.

It’s not good enough though, we all know that PayPal have to close dodgy accounts to protect both buyers and sellers, but when a legitimate business gets caught in the net there needs to be a system in place to get them back online and trading within days if not hours. PayPal would have us believe that they’re the best and only online payment system that we need. They’re also pushing hard to get retailers to use PayPal for offline payments.

The PayPal customers highlighted in today’s Watchdog should quite simply have been provided a speedy method to get back trading… assuming Watchdog didn’t withhold further information which justified the account limitations. We’ve come across cases before where the customer didn’t reveal all pertinent information but we’ve also come across plenty of cases where accounts were limited which to all appearances should have been free to carry on trading.

If you missed the program you’ll be able to watch the full Watchdog episode online later this evening.

Comments are closed.

Recent Comments

12 hours ago
SAM: Ahhh Game.... down a lot for us this year, but we have kept it going...
12 hours ago
SAM: Yeah we will see what happens after that TOTAL disaster they had at Christmas. Down...
14 hours ago
andyjamesuk: In the 60s a big fuss was made when the trafalgar Square PO went 24...
18 hours ago
Kevin: What would make more sense would be for Amazon to create a copy of YouTube...