Paypal is holding my funds for 180 days. Is this legal?

[PhilipCohen]

The principal reason PayPal is now so aggressively applying lengthy holds on seller-users’ funds is because PayPal’s clunky, stand-alone payment system is causing too much trouble for the real banks with charge-backs and other transactional disputes and PreyPal has apparently been told to shape up or ship out, and if they don’t shape up, then they risk having their “merchant account” with the infamous Wells Fargo Bank declared “persona non grata”. (Funny too how the unscrupulous tend to congregate.) This, of course, is the same risk that any unscrupulous merchant account holder faces with the real banks. And what could such action against PreyPal mean? It would effectively mean the end of the clunky PreyPal.

Therefore, there is little chance that PreyPal will, of its own volition, cease applying these funds holds—which are a clear breach of the conditions applying to its money transmitter licences. (Still, it would be nice to think that the situation was causing the “eBafia Don” some loss of sleep.)

Notwithstanding that users have supposedly “agreed” to these funds holds, the details of which are buried somewhere deep in the bowels of the PreyPal user agreement, the fact is, such conditions, that are contrary to the state regulations that control PreyPal’s “money transmitter” licence, are not enforceable, and the local Money Transmitter Regulator should instruct PreyPal to desist if users complain about such unlawful funds holds.

If users are not happy about PreyPal holding their funds without valid reason, they should do something about it. It appears that in the US relief can be obtained from this arbitrary and nominally unlawful activity by lodging a complaint with your state’s “Money Transmitter Regulator” at

http://www.mtraweb.org/docs/2012_Contact_list-for-General-Questions-Money-Transmission.pdf

 

[Love Of My Life]

^ certainly would consider doing this as well....

 

[kemilia]

Whatever monies I ever have sitting in PayPal (no matter how small an amount), I always transfer it out to my bank immediately. Though, maybe in your $1500 case, PP would block that transfer.

 

[MsHolly]

Whatever monies I ever have sitting in PayPal (no matter how small an amount), I always transfer it out to my bank immediately.

Same here, but I sold a few high-priced items on ebay and all the winners happen to pay on the same day and then they limited my account, freezing all the funds before I had a chance to transfer any of it. Although, had I transferred it before the freeze, they would have reversed it anyway. I could understand the worry on Paypal's part that a chargeback could occur, but I'm pretty sure there is maybe a 30-60 day window that a buyer could file a chargeback and the 180 days is just excessive and shady as I suspect they are using it for investing. I recently heard Paypal acquired Bill me Later, a popular online credit card/lending company, so that's probably what they are using frozen funds for, which is highly illegal without my permission. I have filed with the BBB to retrieve my legitimately earned funds and will see what happens from there.

 

[tutushopper]

Same here, but I sold a few high-priced items on ebay and all the winners happen to pay on the same day and then they limited my account, freezing all the funds before I had a chance to transfer any of it. Although, had I transferred it before the freeze, they would have reversed it anyway. I could understand the worry on Paypal's part that a chargeback could occur, but I'm pretty sure there is maybe a 30-60 day window that a buyer could file a chargeback and the 180 days is just excessive and shady as I suspect they are using it for investing. I recently heard Paypal acquired Bill me Later, a popular online credit card/lending company, so that's probably what they are using frozen funds for, which is highly illegal without my permission. I have filed with the BBB to retrieve my legitimately earned funds and will see what happens from there.

Not sure the BBB can retrieve funds, but an attorney/judge I would think would have more power to do so. In addition, you might want to contact your legislator/attorney general/whomever controls money in your state to lodge a complaint.

 

[MsHolly]

Not sure the BBB can retrieve funds, but an attorney/judge I would think would have more power to do so. In addition, you might want to contact your legislator/attorney general/whomever controls money in your state to lodge a complaint.

Thank you for your advice. I will keep that in mind if it doesn't work out. I was hoping the complaint alone would scare them into just releasing the funds early to avoid dealing with me and the BBB. I read on another forum that threatening to file with the BBB actually worked in releasing the majority of the funds immediately, so maybe it will work, maybe not. No idea what they base the decision on, but time will tell.
Honestly, the cost of a lawyer would not make it worth the amount they are holding, but based on principle, I won't let them keep it forever. If they hold it past the promised date, I will certainly sue for the amount they try to keep plus lawyer fees and court costs if necessary. They should not be allowed to get away with doing this to people as I am sure it violates some law against keeping the funds longer than necessary or forever.

 

[lizmil]

Hi all,

Short story:

I have almost $1500 in my Paypal account. Paypal will not release the funds because it is linked to another account with a $90 negative balance. The original account was hacked into and fraudulent activity occurred. Paypal stated I had to cover the outstanding balance before releasing my funds. I refused. Now they are saying they will hold my funds for 6 months.

Can Paypal LEGALLY hold my funds for 6 months? Should I get a consumer attorney involved?

Thank you.

I was curious and typed "paypal withholding funds" in Google search. this class action lawsuit referring to 180 day holds came up. It is from 2010, perhaps these folks could give you some advice?

http://www.letssuepaypal.com/Paypal_Complaint.pdf

 

[tutushopper]

I was curious and typed "paypal withholding funds" in Google search. this class action lawsuit referring to 180 day holds came up. It is from 2010, perhaps these folks could give you some advice?

http://www.letssuepaypal.com/Paypal_Complaint.pdf

That was one very interesting read...wonder why I never heard about it at the time (probably as I was not using ebay or paypal during 2010). I would definitely get in touch with either one of the firm's offices or someone involved to find out what has happened thus far.

 

[MsHolly]

I was curious and typed "paypal withholding funds" in Google search. this class action lawsuit referring to 180 day holds came up. It is from 2010, perhaps these folks could give you some advice?

http://www.letssuepaypal.com/Paypal_Complaint.pdf

Thank you for posting this. I have been selling on ebay since 2002 and when I did a google search recently, I never came across this information. I had no idea there was a pending lawsuit from 2010 and I feel even more deceived that I was not asked to be a part of the Class Action as this obviously affects me since I was selling and an active Paypal user at the time. I hope this lawsuit actually does some good rather than just paying off a bunch of lawyers as that's usually what happens, but that it forces Paypal to change their ways, but honestly, I'd rather just see Paypal shut down their services and go bankrupt instead as they do not deserve to have a business since they can't properly run it. It's a real shame that I, among many others, have to close my ebay business because of this because about 99% of buyers will ONLY use paypal (unknowing what's about to happen to them too)

 

[juneyeung]

I also had this problem last month. In June, I receive three successive transaction which firstly paypal accept the payment and then freeze it after an hour. I could not open the case in ebay and at the same time paypal no reply in customer service. I had waited till now and I could just cancel one order.

 

[elynnin]

lol "PreyPal"

 

[kasage00]

I know this is from 5 years ago, but what are the updates? I read that PayPal was sued before for holding the funds for 180 days, and as of this day, they still do it. Paypal permanently limited my account (without a warning or a chance to appeal) because of some anti-virus software I sold on ebay. Many other people sell this anti-virus software on ebay, and even use the same pictures as mine. Are their accounts getting limited too? I also find 180 days is going to extremes. I have about $3000 in held funds. I read on here to file a complaint with the attorney general...is that my state (PA) or theirs (CA) or both?

 

[shauna192]

I had my PayPal closed nearly a year ago and they are still holding my funds. I have emailed them about the 180 day period being over, yet they refuse to give me a clear answer or my money!

The good thing is that I had a new account created under my business name with the help of Auction Essistance so they won't link me back to my old PayPal email.

But even then, I have over $10,000 trapped in my old PayPal that they have yet to release to me. Frustrating to say the least.

 

[BeenBurned]

I had my PayPal closed nearly a year ago and they are still holding my funds. I have emailed them about the 180 day period being over, yet they refuse to give me a clear answer or my money!

The good thing is that I had a new account created under my business name with the help of Auction Essistance so they won't link me back to my old PayPal email.

But even then, I have over $10,000 trapped in my old PayPal that they have yet to release to me. Frustrating to say the least.

If what you say is true and if they've help over $10K for a year, you have a valid lawsuit!

 

[BeenBurned]

That should say "held" not help!