BEWARE EBAY and PAYPAL’s SCAM on SELLERS
Before you start selling on Ebay there is an unethical and somewhat illegal practice they have implemented that you should be aware of. This is something they do not tell buyers about, when a buyer bids on an item and wins he pays for the item price plus shipping, however unless the seller has over 100 positive feedbacks Ebay and their other company that they own, Paypal puts the entire amount of money “ON HOLD” for up to 21 days or until the buyer leaves good feedback. (Sellers are not allowed to leave buyers anything but positive feedback no matter what kind of behavior they engage in) THE BUYER PAYS SHIPPING MONEY IN GOOD FAITH and believes that the seller will use this money to ship thier item, but EBAY holds that money ina high interest bearing account and will not release any of it..including the money to ship the item..until good feedback has been left (which a buyer isnt going to do until he gets the item, or until three days after they have proff of delievery..this is only done when the seller uses Paypal to print a shipping label…a task he cannot perform because the shipping money the buyer has paid to the seller (NOT TO EBAY) is being illegally hijacked and held hostage by Ebay/Paypal.
So the seller is forced to pay out of his own pocket to ship the item in hopes that when the buyer gets it he will be happy with item and leave positive feedback, in some cases buyers have figured out that they can get items sent to them, keep them and get thier money back, in effect stealing these items from the seller.
Ebay has become an insidious monopoly that dictates unreasonable and unethical practices concerning money, they are not a bank yet they are engaging in Escrow accounts and the interest that is skimmed off the hundreds of thousands of dollars they have on hold is never passed on the seller but is kept by Ebay.
I call for a class action lawsuit to be leveled against Ebay and this practice stopped once and for all, it creates a financial hardship for most sellers and violates California (where Ebay is located) and Federal Trade laws, undermines sellers ability to get items out in a timely fashion and is hostile to sellers who already pay ebay fees simply to list items on the site. They are penalizing newer sellers and playing favorites with power sellers consistantly sell high volumes of merchandise, thereby keeping the smaller sellers at a lower level to help the power sellers.
Furthermore the buyer is not made aware of this, and since Ebay owns and controls Paypal (which they have made a mandatory payment option for newer sellers) they feel they can do anything they want, this is Un-American and Indecent, there are Laws against Monopoly’s in this country and laws against operating as a bank when one is not a bank.
Contacting Ebay or Paypal about this issue does absolutely no good, most of thier customer service agents are from India and cannot comprehend what you are talking about and Ebay has given them a “talk sheet” on the subject which only goes in circles, they foolishly claim its for the bidders “Safety” but they already had measures in place to get your money back if something was wrong with your item. If you email customer support they send out a form letter and ignore any questions you ask on the subject. This is not how they became as large and powerful as they have become, they once were very user friendly with only a very small percentage of problems.
Please contact any class action attornies you know, the California State Officials, Federal Trade Commission and The Better Business Bureau and report this travesty to the proper authorities, when a company like Ebay/Paypal is allowed to get away with illegal and unethical bullying and extortion like this it sets the wrong standard for future businesses and banks and mortgage companies and other entities across the land.
Beware Ebay’s secret attempt the control the money a buyer pays to you (not them) in good faith and use it for thier own means
This post was submitted by michael fuller.
June 25th, 2009 at 9:59 pm
Hi there,
I agree when you told us about Ebay and Paypal scam on sellers. I live in Malaysia and I opened Ebay Store a few month ago. I opened my auction at 150USD but a few people from US bided my item until it reached 2400USD. After the auction closed, the winner refuse to pay but I have to pay for the loading fees around 80USD to ebay. Of course I do not want to pay because the winner refuse to pay also.
As the result. my ebay account was suspended and you know what? My paypal account also involved! I got this email from paypal:
“Thank you for taking the time to write to us with your concerns. I am
happy to assist you further.
We appreciate your interest in PayPal. Unfortunately our decision to
close your account is final.
PayPal reserves the right to close any account reported to be involved
in possible fraudulent or high risk behavior. In the event of a
dispute, PayPal will seek to recover the funds from you by debiting your
PayPal balance and, if there are not sufficient funds in your PayPal
balance, PayPal reserves the right to collect your debt to PayPal by any
other legal means.
Due to the potential risk of chargebacks or other action filed by
buyers, your balance will be held 180 days from the date of your
limitation. At that time, any remaining funds will be available for
withdrawal.
Sincerely sorry for the inconvenience that may cause you.
We appreciate your patience and understanding regarding this matter.
Thanks again for contacting us. It is my pleasure to assist you. Thank
you for choosing PayPal.
Sincerely,
Fanny
PayPal Account Review Department
PayPal, an eBay Company”
This is bullshit! They want to close my account but at the same time they hold my fund for 180 days!! I have around 2000USD in my paypal account and they treated me like this. I really hate paypal! Now i just wish after 180 days i can get back my money and hopefully paypal won’t give any bullshit reason for not giving it to me.
Paypal & Ebay sucks!!
July 28th, 2009 at 1:47 pm
I used to use ebay often, but with the new ebay paypal rules, I will no longer list items! I do not like being told by ebay that I must accept paypal as a form of payment!
September 9th, 2009 at 9:16 pm
This hold by ebay is illegal….
It is time to file a class action suit !!
Lets get the ball rolling !!
Let me explain.
Paypal has everyright to hold funds as a banking center I concur with this.
however….. it is not Paypal holding the funds, it is Ebay.
Paypal is following directives imposed by Ebay the hold is being intitiated on the Ebay side I know this to be fact after arguing exstensivly with both parties.
It started when I opened a new account under a new name for an expanded business last month.
I have been current with ebay since 2004 I am a powerseller with 100% feedback rating and lauded by Paypal for having a steller record.
When I open the new account the first 2 order no problem, the next all in a row have been held by ebay.Ebay say this is random hold and that Paypal is doing it. This is false
It is not random either!! and ebay is doing it, ebay does not have the authority to hold funds as they are not a banking center.
They are illegally hold funds and are telling Paypal to hold funds for them, this is illegal.
I tell what they are doing…… Ebay has lost many sellers due to thier backward policies that protect buyers and leave sellers flapping in the wind….
Paypal processes 1000 transactions per minute….now…. the longer they hold it the more money they can make on interest…
Interest……ing eh?
Since Paypal is owned ebay, ebay is making money on the interest for the orders they are telling paypal to hold.
Not only is this illegal it is “Theft by Deception”
They are stealing yours and my money for up to 21 days while they draw interest…while forcing us to pay for product without the funds we have earned with our selling prowness……
Does anybody here get a free ride from Ebay???
I don’t and there are many times ebay makes more than I do because they take value on the whole amount instead a percentage of just the profit like…. we all get….
Do you feel Offended.
I do!!
September 26th, 2009 at 10:27 pm
I agree with everything said regarding ON – HOLD status of payments with Paypal. The process is not expedited and they ignore the status, standing, and length of your account with Ebay or Paypal.
If the process was smooth and quick and worked as described, it would be one thing. If you want your money within the month it absolutely REQUIRES your involvement. You can meet all requirements for your payment to be released but it will not matter unless you waste your time and contact them (as if you havent been insulted enough already) or if a month transpires and you just sit and idly wait while they incrue earnings off of interest of YOUR MONEY that they have locked up and left you unable to access.
You are also left hanging in the wind as seller regarding shipment payments, which not only goes against the process structure of the Held Transactions, but totally undermines the business aspect of online auctions.
And what of the feedback? I have had buyers totally ignore feedback and move on with their lives and onto other auctions without ever leaving feedback. Contacting these people rarely helps, if ever. This itself undermines the feedback system of Ebay because now sellers will be totally afraid to leave negative comments or to approach buyers agressively after repeated unanswered emails.
I would like to join a class action lawsuit if one were to materialize.
October 5th, 2009 at 11:58 am
If a lawsuit materializes as well I want to be involved. I have been a member since 2004 and have 100% feedback, but only with 60 transactions, not the 100 they require. Still I have proven myself as a reliable seller.
I won’t reiterate how unethical and illegal this is, but I have new information that makes what they’re doing even worse:
A friend of mine who has a similar ebay account rating and falls under the paypal hold policy, called them and threatened them with a lawsuit if they didn’t release the money. Somehow on his account under the Resolution Center link, a “lift payment hold” or similarly titled appeared and when he clicked on it, he had to enter 3 bits of information to verify. I believe it was his SS, his email and his address. I witnessed him do this, and as soon as he did, the hold was lifted. This shows that PayPal has the ability to lift the hold before any of the other release circumstances.
This makes it worse because not only are they not being truthful about it being a random policy,they are lying by saying that they can’t lift a hold. They CAN they just don’t want to.
October 20th, 2009 at 5:00 pm
Paypal practices under the direction of ebay for holding funds is unacceptable and should not be tolerated. They are holding funds which they are not suppose to. They created this hold funds in their favor not to the benefit of seller or buyer. The sad part about this is they are holding the seller funds where you as a seller can actually use the funds for other purpose. What they do is they collect their fees and seller fees for ebay and they hold your funds, they should actually take the paypal fees and seller fees after the item has been shipped or after the buyer leaves feedback. This is like let us take our share first and then you are on your own. This is like your are force and you have no choice as a seller when the item was sold in ebay which is a complete monopoly. We should bring this to the attention of State Attorney General.