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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 23745
Experience:  Senior Partner at Berkson Wallace
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Paypal have retained my money after stating i violated.

Customer Question

Paypal have retained my money after stating i violated. Ombudsman found i was sabotaged . I waited 180 days for my money £3680.40 to find paypal transferred it to themselves for damages !!
JA: Where are you? It matters because laws vary by location.
Customer: United kingdom
JA: What steps have you taken so far?
Customer: Ombudsman stated i was sabotaged and done nothing wrong but i accepted paypals terms & conditions. That reply was before paypal took my money
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No
Submitted: 13 days ago.
Category: Law
Customer: replied 13 days ago.
Dear Ms Moliterno,
The best advice I can offer is to find suitable counsel as soon as you can to look at the overall position properly before taking any hasty action. . PayPal has a dispute resolution procedure which you need to check. It may be compulsory under its terms for you to use this first before resorting to the courts. You also need to be sure that using the dispute resolution process doesn’t prejudice your right to take court proceedings if you don’t get a satisfactory outcome.
The circumstances in which it has simply taken your whole credit balance without any attempt to calculate or show what damages, if any, it has actually suffered looks highly questionable.
From Richard Perkoff
Customer: replied 13 days ago.
From ombudsman before PayPal took my money
Customer: replied 13 days ago.
The Ombudsman has closed the case. A copy of his letter I will post on here as it gives you the case issue as well as his findings. PayPal haven’t believed me. I’m a children’s wear boutique and give lots to charities and families in need. I promise you I haven’t violated terms & conditions.
Our ref
Your ref
Dear Mrs Moliterno
Your complaint about PayPal Europe Sarl & Cie, SCA
Thank you for your patience whilst I’ve been looking into your complaint. My role as an investigator is to review the facts and information I have and give an honest an impartial opinion. On this occasion, I’m afraid I’m unable to ask PayPal to take any further action. I’d like to fully explain my reasoning.
The complaintYou own a children’s clothing boutique and you use PayPal to accept payments from your customers.
On 5 November 2020, you received a £2 payment to your PayPal account with the word ‘raffle’ as a payment reference. You didn’t know what this payment was for and so you refunded it.
PayPal blocked your account and have now advised they have decided to close all your PayPal accounts. PayPal have retained monies in your account for 180 days.
This has severely impacted your business. You couldn’t trade on Good Friday which is one of the busiest days of the year for your business. PayPal withholding your money has impacted your cashflow.
You received payments a few years ago for a lottery and PayPal informed you then that this was a restricted activity, so you were already aware you couldn’t use your account in this way.
You feel you’ve been sabotaged and PayPal are punishing you even though you’ve done nothing run.
You’d like PayPal to lift the block from your accounts and pay you back your funds.
My FindingsI’m sorry to hear PayPal has decided to close your accounts. I can understand the impact this has had on your business.
I’ve reviewed the facts and information surrounding your complaint, from a third party’s point of view, to assess whether I think PayPal has made an error or treated you unfairly. I’m afraid I wasn’t able to identify that they have.
Firstly, it’s important for me to clarify our service’s role in your complaint. It isn’t our role to determine or decide whether you were using your PayPal account for a lottery or restricted activity. Closing your account is a commercial decision for PayPal to make. Instead, it’s our role to assess whether PayPal were within their rights to close your account, or has acted within their policy or any agreement with you.
When you opened your PayPal account on 19 June 2012, you were required to agree that you accepted PayPal’s User Agreement and PayPal’s Acceptable Use Policy.
I’ve reviewed PayPal’s Acceptable Use Policy. This explains:
‘You may not use the PayPal service for activities that relate to transactions that are associated with purchases of annuities or lottery contracts’.
So I can see PayPal have stated that you can’t use your PayPal account for a lottery, and this is agreed to when anyone opens a PayPal account.
I’ve reviewed this User Agreement and it explains:
‘In connection with your use of our websites, your PayPal account, the PayPal services, or in the course of your interactions with PayPal, other PayPal customers, or third parties, you must not:
Control an account that is linked to another account that has engaged in any of these
restricted activities.’
From this, PayPal have stated that you can’t operate another account if you have one account that has engaged in any restricted activities.
The User Agreement then states:
‘Actions We May Take if You Engage in Any Restricted Activities.
Customer: replied 13 days ago.
If we believe that you've engaged in any of these activities, we may take a number of
actions to protect PayPal, its customers and others at any time in our sole discretion. The actions we may take include, but are not limited to, the following:
-Terminate this user agreement, limit your account, and/or close or suspend your account, immediately and without penalty to us.
-Hold your money to the extent and for so long as reasonably needed to protect against
the risk of liability’.
- Block your PayPal account and/or hold any funds in the reserve account (including, without limitation, for more than 180 days if so required by PayPal, where PayPal's rights arise from your engagement in the restricted activity).’
I appreciate PayPal closing your accounts has caused you a lot of frustration because you said you haven’t used your PayPal account for lottery payments. And I’d like to make it clear that I’m not disputing what you have said. From what you’ve explained, I can completely understand the situation this has left you in and your cause to complain.
However, as previously discussed, it isn’t my role to determine whether you used your PayPal account to accept lottery payments.
The crucial statement in PayPal’s User Agreement is that they may close your PayPal account(s) at their ‘sole discretion’ if they ‘believe’ that you’ve engaged in restricted activity.
This means that they don’t have to consult with anyone else prior to deciding to close your account. It’s their commercial decision to make in order to minimise risk.
They also just have to believe or suspect you may be using your account for a restricted activity. Crucially, PayPal don’t have to prove without doubt before choosing to close your accounts.
On 9 September 2020 your PayPal account received a payment of £3 with the transaction note ‘raffle’. On 5 November 2020 your PayPal account then received another payment of £2 from a different payee which noted ‘raffle’ along with the payee’s details. I’m sure you can understand that these transactions, coupled with the fact that PayPal has had to advise you to not use your account for this in the past, has now caused PayPal to believe you may be using your PayPal account for a restricted activity.
In this case, PayPal have demonstrated why they chose to close your accounts and retain your funds. They have also acted within your User agreement. Because of this, I’m afraid I’m unable to suggest for PayPal to take any further action.
I do appreciate this may not have been the outcome you were hoping for. I hope you can see how I’ve come to this view through what I’ve explained. I’d like to thank you for your time and patience whilst I’ve been looking into your complaint.
Next stepsI think this is a fair outcome in the circumstances, for the reasons I’ve explained. But if you decide that you don't accept what I’ve said, then please let me know by 7 May 2021. If I can’t resolve things then an ombudsman here can look at everything again and make a final decision. If I don’t hear from you by that date we might not be able to look at your complaint again.
Kind regards
Ryan Wims | Investigator |***********Financial Ombudsman Service | Exchange Tower, London, E14 9SR
Customer: replied 12 days ago.
No answer received
Expert:  Virtual-mod replied 12 days ago.

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Customer: replied 12 days ago.
happy to wait thank you
Customer: replied 12 days ago.
I need a letter before court action written regarding unjust enrichment and on what merits they think they are entitled to take my money. Damages they caused my business I intend to claim for should this reach court
Customer: replied 12 days ago.
Hi i still haven’t had a reply
Customer: replied 12 days ago.
Today i registered my complaint with FCA and am starting to put a letter together
Expert:  Stuart J replied 11 days ago.

I have been asked to look at this for you.

You say that you complain to the ombudsman.  Presumably, that is the Financial Ombudsman.  I can’t see why the Financial Ombudsman would find against you but they don’t appear to have dealt with everything.

However I’m not certain why you are now complaining to the Financial Conduct Authority.

PayPal at liberty to deal with whoever they like and you cannot compel them to keep your account open.

On the other hand they are not entitled to keep money which rightly belongs to you so if the money does rightly belong to you, I don’t know what basis they think that they are entitled to keep it because if it doesn’t belong to you, it doesn’t belong to them!  It should be returned to whoever owns it.

However you can’t beat them with a blunt instrument until they pay up and PayPal are no more exempt from legal proceedings than anybody else.  The problem for you is that unless you have a UK address, you are going to be issuing court proceedings in Luxembourg which is not particularly practical.

Customer: replied 11 days ago.
The money is clearly mine for items my customers purchased so not sure why you would raise that point. Are you able to help me do a letter before proceedings ? I have loved complaints with FCA Ombudsman cssf and PayPal I seem to be banging my head against a brick wall and my business is suffering. I had an email from PayPal to say they are revising my case again but still no questions answered. I asked what they have in place for companies or people that are sabotaged and how and if they can explain what damages I have caused PayPal for them to take my money. No answer yet.
Customer: replied 11 days ago.
I found these addresses
Customer: replied 11 days ago.
Customer: replied 11 days ago.
Customer: replied 11 days ago.
From companies house
Expert:  Stuart J replied 11 days ago.

The only address that I know of for PayPal is in Luxembourg although you may have UK addresses for the individuals.

As I said earlier, they cannot be compelled to continue to do business with you but if they have breached their own terms and conditions, they are in breach of contract and you potentially have a claim to make against them but you need to bear in mind that they have unlimited money to conduct litigation well as you would be faced with paying your own legal costs and they could be tens of thousands of pounds.

Getting the money back from them however is going to be small claims court and its adjacent simply writing to them and telling them that unless they pay by a particular date (end of the month?)  You will be issuing court proceedings against them.

You would need to look at the terms and conditions to see which law applies because you could well be issuing court proceedings in Luxembourg and for GBP4000, that’s not a practical proposition.

Customer: replied 11 days ago.
Thank you your advise is somewhat different to the barristers
Expert:  Stuart J replied 11 days ago.

Do remember that I can only give you my opinion.

Another lawyer may have a different opinion. Litigation needs at least 2 parties and neither goes to court expecting to lose.

Nonetheless, one of them does, even though they have been told by their respective legal advisers that they have a good chance of success.

If there was a black-and-white answer to every legal problem there would be no need for anything to ever proceed to court.

If the barristers opinion is more favourable, then go for it but ask whether it comes with a guarantee and find out how much money it’s going to cost you to get there.

Customer: replied 11 days ago.
It’s awful what they have done. I’m just trying to get back what’s mine
Expert:  Stuart J replied 11 days ago.

I couldn’t agree more.  I think it’s appalling myself.  Unfortunately they judge jury and executioner and when they have made their mind up, that’s it.  This kind of conduct is widely reported.

Customer: replied 11 days ago.
Ok so I will send out a letter before proceedings as I actually wasn’t in breach ombudsman stated I was sabotaged
Expert:  Stuart J replied 11 days ago.

That’s how I would start the process.

Customer: replied 11 days ago.
Thank you
Expert:  Stuart J replied 11 days ago.

It was my pleasure to assist you. Please come back if anything else crops up and needs clarification.
Thank you for trusting Just Answer with your legal problem.