Taking PayPal to small claims.

[NiceGuySi]

Paypal without warrant or warning locked my funds and have told me I can no longer have an account with them. When I ask why they simply say I have violated the terms of service and send me a copy. I do not believe I have and asked on multiple occasions to tell me exactly what part of their terms I have breached. They will not tell me nor release my funds.

I have started small claims proceedings with them. I have been sent their defence and a form N180. I am not sure what I need to do next, apart from fill it in and send it back to the court.

Do I also need to send the defendant Paypal a copy? They are also asking for the claim to be thrown out. Do I need to try and counter it?

Thanks for reading.

[james_law]

Paypal just would not lock the funds in the account for no reason and to deny that you have an account with them is ridiculous. What have you been using the account for? What do you think the reason for locking you account would be?

[jaguarsuk]

See my signature regards N180

[NiceGuySi]

Sadly this is the case, A quick google will show you that they do this all the time. I have only been stung for £600 but other people have had it done for tens of thousands of pounds.

PayPal says the account is with another legal entity and not with them, but strangely they have managed to send me a copy of my contract from the "other" company who they have nothing to do with.

Please see attached the front page of their defence.

[4737 Carlin]

What was the reason why you listed PayPal (UK) Limited as the Defendant?

[R0b]

First of all, I think you've made the same mistake as many others have by issuing a claim against PayPal (UK) Limited. Under company law rules, every company is considered a separate legal entity. In other words, just because PayPal (UK) and any other PayPal entity are not one and the same simply because they are called PayPal.

The PayPal website under the "About" and "Legal" section make it clear that the service is provided by PayPal (Europe) S.à r.l. et Cie, S.C.A. and not PayPal (UK) Limited.

So on the face of it, you have issued a claim against the wrong entity and if you proceed down this route, you are likely to be unsuccessful and a judge may award wasted costs against you for pursuing it. You might want to consider discontinuing the claim and issuing fresh proceedings against the correct entity but by discontinuing now then you will subject yourself to potential costs from PayPal. It might be smarter to wait until the claim has been allocated to the small claims track before discontinuing because you will be protected from costs, unless PayPal choose to make an application to recover them (unlikely but possible).

Should you choose to pursue the correct entity, you will need to serve the claim form out of jurisdiction of the court and this is certain criteria as to whether or not you need the court's permission to do that (seeking permission requires an application at cost of £255). I would think that as they are based in Luxembourg, you might get away with not having to seek permission but don't quote me on that.

Finally, if PayPal are terminating your account without giving reasons, the first thing that springs to my mind would be money laundering, which would entitle them to retain the funds pending a response from the National Crime Agency, but should be released after a certain period of time if no answer has been given. As James_Law has said, they wouldn't do it without a specific reason however much it might be common that this is what is done to users.

[NiceGuySi]

I can certainly say that no money laundering has happened. If they believe that to be the case then why will they not tell me? Sick of big companys hiding behind 500-page T&CS. Also I have served it on the "wrong" company then why have they sent me a copy of the contract? if they are nothing to do with it how would they have access to it? This makes me sick that a company can just steal money and a person has no legal recourse.

[NiceGuySi]

All you need to do is look on trust pilot to see how they act.

https://uk.trustpilot.com/review/www.paypal.com

[R0b]

I completely understand your frustrations having had issues with PayPal in the past but as far as contract law goes, your right to pursue action is against the parties to the contract. If you enter into a contract with Mr Smith to install your kitchen and does a naff job, you can't issue legal proceedings against Mr Smith's wife simply because they are related. The same analogy applies to PayPal; just because the companies are related does not give you the right to claim against a PayPal entity that wasn't a party to the contract.

The fact that PayPal (UK) have supplied a copy of the terms and conditions relating to PayPal (Europe) S.à r.l. et Cie, S.C.A.is of no relevance as to the legal effect of the contract (they could have obtained a copy from the website or asked someone from PayPal (Europe) to supply a copy). Regardless, your contract continues to lie with PayPal (Europe).

If they believe that to be the case then why will they not tell me?

The answer the to above will be no, because that will amount to what is known as tipping off which is a criminal offence.

This makes me sick that a company can just steal money and a person has no legal recourse.

There is legal recourse, you just have to follow the rules. The rules are in place for a reason and admittedly is going to be confusing for the average person but there is plenty of guidance and information if you search for it online and you can also consult the Civil Procedure Rules as to how to go about things.

Part of the wider problem is that litigants in person tend to just issue a claim and then complaining that they've got it wrong or they lose their claim because they haven't followed the correct procedure. Whilst it might sound unfair to do that, the Court's have made it clear that there is not one rule for litigants in person and another rule for those who are legally experienced. Hopefully this will be addressed in the future but this is why you have to be careful that you are pursuing the correct person or business entity because if you don't, that could have damaging effects to the innocent defendant and you would likely be held to account for doing so.

If you want more information on banks making a Suspicious Activity Report (not to be confused with a Subject Access Request) I would suggest you read this information article by the National Crime Agency.

[james_law]

People are not here to criticise you or judge you even, they are here to help you. You can only be helped if you tell us the full story.......

I personally have never had a problem with Paypal. Unless something looks or is actually fraudulent then Paypal will not interfere. It would help the situation and people would be able to give specific advice if you told us;
1). Where the £600 money came from they have ?
2). What the £600 was for?

While you may believe you have done nothing wrong (no way insinuating you have or have not), I just can not see Paypal unlawfully taking the monies. If you give us the full story then people can and will be able to help you.

[NiceGuySi]

I understand you are just giving advice on how things work in reality. I was venting that in reality, I can do nothing while they have my money. As for the money I sell games on Ebay and the amount is made up of lots of transactions. I have sold on Ebay for years taking payments through Paypal with no problems until now. When they locked the account they also closed my eBay store down effectively as you need a Paypal accont to take payments.

[R0b]

Are you able to share the correspondence between yourself and PayPal?

Ideally we would like to see the notification from PayPal saying (1) they have terminated your account for breach of the terms (2) your response asking what clause you appear to have breach and (3) any response to that.

PayPal cannot just hold your money because, in a criminal sense that is theft and under civil law, it will be a claim for restitution for loss of the £600 and probably interest too.

How long have they held the money for? I assume it's longer than 31 days if you are at the stage of PayPal (UK) issuing a defence?

[NiceGuySi]

This is the message I was greeted to when I logged in.

"You can't use PayPal anymore

At PayPal, we value a safe community for our customers to do business. We've noticed activity on your account that's not in line with our User Agreement, so we can no longer offer you PayPal services.


Any bank account or credit card details attached to your PayPal account can't be removed nor can they be used to create a new account. You can still log in and see your account information but you can't send or receive money. Any money in your balance will be held for 180 days, after which we'll send you an email with instructions on how to transfer your money."


This is the email I received from them

After reviewing your account activity, we've determined that you're in violation of PayPal's Acceptable Use Policy. As a result, we've placed a permanent limitation on your account. Please remove all references to PayPal from your website(s) and/or auction(s). This includes not only removing PayPal as a payment option but also the PayPal logo and PayPal shopping cart. As per the User Agreement, when PayPal places a permanent limitations on an account due to an Acceptable Use Policy violation, any funds in your account will be held for 180 days. After 180 days, if applicable, we'll contact you with information on how to withdraw any money from your PayPal account. Should any chargebacks result in your account balance falling below zero, you'll also need to settle the amount owed to PayPal to avoid further action. You can find the complete PayPal Acceptable Use Policy by clicking Legal at the bottom of any PayPal page.

__________________________________________________ __________________________________________________ ___________________
This is the reply to my appeal


Dear *****

Thank you for contacting PayPal regarding the limitation on your account.

Please be advised that due to the violation of PayPal's Acceptable Use Policy, your account will remain permanently limited.

The PayPal User Agreement states that PayPal, at its sole discretion, reserves the right to limit an account for any violation of the User Agreement, including the Acceptable Use Policy.

The complete Acceptable Use Policy can be found by clicking on Legal at the bottom of any page of our website, and then selecting PayPal Acceptable Use Policy.

Per the User Agreement, when PayPal permanently limits an account due to an Acceptable Use Policy violation, we may hold your funds for up to 180 days. For full details around the release of funds process, please refer to our original email outlining details of the limitation.

If you have not yet done so, please remove any references to PayPal from your website/auction site.

Sincerely,
Paul
PayPal, Brand Risk Management
--------------------------------------------------
Copyright © 1999-2018 PayPal. All rights reserved.
PayPal (Europe) S.à r.l. & Cie, S.C.A.
Société en Commandite par Actions
Registered Office: 22-24 Boulevard Royal, L-2449 Luxembourg
RCS Luxembourg B 118 349

Responses to this email address are not monitored.



I have repeatedly asked what I have done to breach their rules. They will not tell me and simply send me a copy of the user agreement. I have been through it multiple times and I a not done anything to breach it. This is the most frustrating part.

__________________________________________________ __________________________________________

They have at least acknowledged my complaint to the financial ombudsman.

3 January 2019

Dear ******

On behalf of PayPal's Executive Escalations department, I can acknowledge receipt of your Financial Ombudsman Inquiry received on 3 January 2019.

Your complaint has been assigned to one of our Executive Escalations Specialists, who will investigate your inquiry and issue a response as soon as possible. Please note all correspondence is dealt with in the order it is received.

In the meantime, please feel free to contact our department directly quoting your Reference Number: 7006138 at ppelce@paypal.co.uk if you have any further questions or concerns.

Yours sincerely,
Lynn Byrne

Executive Escalations
PayPal

Copyright © 1999-2019 PayPal. All rights reserved.
PayPal (Europe) S.à r.l. et Cie,
S.C.A. Société en Commandite par Actions.
Registered Office: 22-24 Boulevard Royal,
L-2449, Luxembourg,
RCS Luxembourg B 118 349

[Goinginsane]

Hi! I’ve read your posts and I was wondering if the financial ombudsman solved your PayPal issue? I have emailed PayPal too many times to count and they keep copying and pasting replies.*

[luxardo]

I know a few people this has happened to. Customers had complained the products they bought were counterfeit hence the action to close accounts Or they make some other complaint about you that you have acted illegally.
I hear that rival ebay shops do this, they buy something from a rival then complain it is counterfeit to get the rival shut down. It's like a drugs turf war !!!!!
Have a look and see if anyone not known to you has made a small purchase and returned it or complained about you in anyway recently,that should give a clue.
I don't have any advice to add than what you have had already but personally I'd just wait the 180 days and get your money back.
They do eventually refund, they only hold the money in case there's a claim or legal order.
It will take longer than 180 days to get to court anyway and you will not win as they have done nothing illegal or breached any contracts plus you will incur legal and court fees as well.
You agreed to this when you opened the account, it will be somewhere in the small print I guarantee.