• Petitioned FTC's Bureau of Consumer Protection

This petition was delivered to:

FTC's Bureau of Consumer Protection

Investigate Paypal & Ebay business practices

    1. Petition by

      David Kavanagh

This petition is to ask the FTC's Bureau of Consumer Protection to investigate Paypal & Ebay. Specifically for their business practices of holding customer funds, freezing accounts, and Ebay freezing accounts. Paypal routinely holds seller funds for 21 days while still expecting the seller to ship the item. No other store in the United States is expected to do this by their credit card merchant accounts so why are Ebay stores expected to do this? Paypal freezing accounts and holding funds for 180 days. Because Paypal is not regulated in the same way as a real merchant account, Paypal accounts are frozen for numerous reasons and without warning. Once an account is frozen , the funds are often held by Paypal for months on end with absolutely no recourse to the merchant. Paypal asks for personal information like social security numbers, credit checks, and copies of utility, cell phone bills. Just because a consumer signs a terms of service doesn't make whats in it right or lawful. In a court case Craig Comb, et al. v. PayPal, Inc it was found that User Agreement and the arbitration clause therein are unconscionable because they: (1) permit PayPal to issue binding amendments to the User Agreement at any time without notice to users; (2) obligate users to arbitrate their disputes pursuant to the commercial rules of the AAA, which is cost prohibitive in light of the average size of a PayPal transaction; (3) obligate users who reside nationwide to arbitrate in Santa Clara county, California, where PayPal is located; (4) permit PayPal to freeze and maintain possession of the funds in customer accounts until any dispute is resolved; and (5) require users to pursue their claims individually, and not via a class action. Taken together, the Court held these provisions made the User Agreement unconscionable, and appear to represent an attempt by PayPal "to insulate itself contractually from any meaningful challenge to its alleged practices." Notice number 4. Its for these reasons that we are asking that they be investigated as well as their terms of service. We are also petitioning that the Bureau of Consumer Protection recommend to the proper agency that Paypal be regulated like a bank since they seem to act as one. Furthermore since Paypal is a wholly owned subsidiary of Ebay we are asking that they be investigated as well. Ebay routinely freezes accounts when Paypal accounts are frozen whether Paypal had a legitimate reason or not. My personal account had 399 feedback, 100% positive, silver power seller, and top rated status. This creates a monopoly that is unfair to consumers.

Recent signatures


    1. Reached 250 signatures


    Reasons for signing

    • C Basa CHICAGO, IL
      • over 2 years ago

      They closed my account for no reason and held my money for 6 months.

    • Mel L OZONE PARK, NY
      • over 2 years ago

      Ebay & Paypal don't care about the people that make them money-- the sellers, and only care about buyers, leaving the playing arena open to scammers and dishonest buyers to take money from hard earning sellers.

    • Sheila Lewis WOODBINE, NJ
      • over 2 years ago

      My Money has been held without Notice and held because of someone lying and trying to scam me,no protection for the seller against fraud.YOU WANT SOMETHING FREE,ALL YOU HAVE TO DO IS SCAM A SELLER AND PAYPAL AND EBAY DO NOTHING.You don't even have to return item in question from what I am reading,Diamonds are free now, I guess,Just tell a few lies and get a free bracelet and your money back! This problem seems to be escalating at warp speed..I have just seen thousands and thousands of post and videos about them,I can not believe no one has investigated them yet.Read some of these nightmares! Are they paying someone to look the other way? They settled the last class action law suit.It seems another one is coming,a huge one it looks like! But they will settle with the money they are stealing! it's a HUGE,HUGE GROWING PROBLEM,I HAVE BEEN RESEARCHING AND I AM AMAZED at what they are getting away with and shocked that this has not been investigated yet,what is going on in this country? HERALDO, BARBARA,60 MINUTES,OPRAH,where are you? THERE'S A STORY HERE! The powers that be have all sold out or they are sleeping! Who's job is this anyway? shame on you slacker! Big Business,Big Bullies,Doing Bad business,they need some competition someone!The Victims need help,this is un-business like behavior and very unprofessional for someone dealing with peoples money!I have never seen so many complaints,I guess we all just think we have to take it,and that is just the way things are now in this country!

      P.S.Before someone gets there knickers in a bunch,I am sure there are Buyers being ripped off also,but they have protection from there credit card companies,that's why they almost always win the disputes!

    • Bruce King WEST DES MOINES, IA
      • over 2 years ago

      Today I was informed by paypal that my damage claim dispute against the purchaser was resolved and that I lost the claim. The paypal agent informed me that what I stated is exactly what the buyer stated as the reason for returning the item.(IF YOU TELL PAYPAL A LIE THEY WILL BELIEVE YOU.) But I don't operate that way I disclose the truth because I'm an honest citizen. The item in description is a vintage coat that was sold undamaged other than the small tear that I disclosed in the ebay auction for $525.00. The buyer opened a case against me, stating the coat had more damage than was stated in the ebay ad (untrue statement). The damage he stated in his dispute was that there were grease stains in several areas of the coat.(PUT THERE BY THE BUYER) (OF COURSE PAYPAL BELIEVES ONLY THE BUYER!) The coat that I sent the buyer after payment didn't have grease stains in any areas of the coat, but the coat I received back from the buyer has been intentionally vandalized with grease stains that I can hardly believe the buyer actually and maliciously did with his own hands. (THANK GOD I GOT THE COAT BACK) I guess from other (PREYPAL WHORE STORIES) where the seller gets back a parcel without the item you sold them but A BOX of RAGS or any OTHER ITEM THAT THE BUYER WANTS TO SEND BACK TO YOU. What is sad is that whatever you state PREYPAL will always honor the buyer.THIS HAS TO STOP!!! I believe the damage that is done cannot be reversed and I need to take it too the dry cleaners to get their opinion. I can prove through the photos I took of the coat before it was posted and the photos of the coat I received back from the buyer after he won his dispute. I also have those unaltered photos on my camera memory stick and iphone. Paypal said they would not accept photos for proof of the damage because they could be altered but they use words from someone either in writing or verbally as proof of damages. So it's a dispute that according to paypal will always favor the buyer because they take the buyers word over the seller which is not fair and totally wrong. I also have additional information / documentation in regards to this case, and do believe it is proof that this buyer used his purchasing of this coat as a retaliatory act of vandalism against me from a previous transaction. In a conversation I had on 2/4/12, with a paypal agent,about the previous transaction that occurred on 12/31/11 between myself and the buyer the agent immediately reversed the payment to my account in my favor. At this time I thought the transaction was resolved after which the agent reversed the payment to my account. But as I found out today I'm responsible for the negative $540.00 paypal account and a damaged coat. How could that be? There is obviously a taped phone conversation between myself and the agent for that date I would think. The agent that reversed the decision on 2/4/12 did act upon making that decision herself without any consultation from a paypal supervisor,at the time I was awarded the reversal of the funds to my account based on her decision, so once the funds were reversed I decided immediately to move the money to my checking account. Now it states that my paypal account is a negative $540.00. I'm almost sure it will be sent to the paypal collections department for retrieval if I don't pay it back. At this point I want to do what's right and take accountability,but on the other hand I feel I shouldn't be held responsible (HOSTAGE) for the damages that have been inflicted on my property. My feelings of anger at this moment are with buyer who did the damages, paypal,and ebay for allowing this buyer to remain held unaccountable for his criminal act of vandalism.But the buyer is being rewarded for his behavior. When talking with the paypal agent supervisor I informed/offered him of a remedy to this correct this situation, The remedy was to stand by his paypal agent grounds of the reversal of payment to seller on 2/4 and it would be over with,but no he was sticking by his decision that the buyer won the dispute and paypal was not going to lose anything in this transaction, but me the customer. I'm so mad now that all I want to do is go ahead and release the $540.00 back to paypal and be done with it. Then close both paypal and ebay accounts and never use their services again. I have spent numerous hours documenting this dispute with paypal about this buyer.I think paypal needs to own up to some and be held responsibilible to help the seller when someone vandalizes,commits a theft against a persons personal property but it seems as the seller loses every time and the buyer is rewarded for his/hers CRIMINAL BEHAVIOR. If these cases of vandalism and theft were occurring in the public spotlight not behind the scenes of preypal and preybay the person/ persons could and be prosecuted for their actions in a court of law. But as we know internet crimes such as all that preypal,and preybay allow will never be prosecuted until the Federal govenrment or some big law firm can file a lawsuit against these two companies.

    • Rusty Loiselle HUNTSVILLE, AL
      • over 2 years ago

      5. When did Papal first start holding funds? Feb.13, 2012 $40.90 & Feb 14, 2012 $84.90

      7. How much money is being held? $125.80

      8. Did Papal say how long they will hold the funds for and/or why they are holding funds?

      Yes on why and No on how long.

      The issue on Feb. 13th started the problem. A guy bought an old vintage computer from me. The description clearly states no warranty, no guarantee, needs work by a professional to make

      It right. This guy received the machine, gave me good feed back and 2 weeks later wants to return

      Machine because of an internal problem. I suspect he opened it up and either scavenged parts or

      Screwed it up and now wants his money back. This problem put my “seller rating” below eBay

      Standards. When the fellow on Feb. 14th paid for his box of computer circuit boards he paid for

      Sale price and the shipping costs. Papal has all of that money frozen. I cannot ship if I have no

      Shipping funds. This puts me in deeper with both eBay and paypal. They want me to take funds

      Out of my pocket to ship with no guarantee that they will eventually release the funds. They have

      Gone into my bank account and taken money without so much as a note. I have tried to block

      Them at my bank source but the bank cannot block them for some reason. I have talked to them

      Until I am blue in the face asking them to JUST RELEASE THE SHIPPING FUNDS. But they

      Refuse. I have tried to cancel my paypal account even though I have $121.55 in it but cannot access it.


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