WA Ebay and Paypal - Australian Consumer Law on Withholding Payments?

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29 September 2015
I have recently decided to sell a few items on eBay to reach a bigger potential market than say Gumtree or other similar sites.

I have now sold about 15 items totaling less than $1000.00

Now comes the problem, each item I sell is apparently subject to a payment of a minimum of 21 days by Paypal.

The first Item I sold, $102.00 was paid via Paypal and was available immediately in my account.
The second item, $90.00 was paid via Paypal and was held for 21 days by Paypal.
The third item $58.00 was paid via Paypal and was held for 14 days by Paypal.
The forth item $160.00 was paid via Paypal and was held for 21 days by Paypal.
The fifth item $277 was paid via Paypal and was held for 21 days by Paypal.
The sixth item $74 was paid via Paypal and was held for 14 days by Paypal.

I still have other items listed with ebay.

Now here are my issues, and want to know what the Australian Consumer Law is in relation to the way Paypal is conducting their business...

Immediately once the payment is made by the seller (using Paypal), they take their fee immediately from the payment, but then proceed to hold it from me for random periods. How can Paypal access the funds to take their fee immediately yet, I can not access the funds for periods up to 21 days? If Paypal are effectively holding the funds in Escrow until both parties are satisfied with the transaction, how can Paypal access the funds?

Secondly, although Paypal apparently state in their terms and conditions that they can hold the funds, I can't find it. How can it be legal for them to do this when I do not agree for the funds to be held in Escrow and effectively, I have sold an item without being paid for it.

Thirdly, how can their be so many inconsistencies in the time they hold payments for (as detailed above)?

I know when eBay/Paypal tried to force everyone to pay only by Paypal that the Australian Government said it was anti competitive and forced them to introduce cash/direct bank deposit in Australia.

Is there anything similar that might apply in the way paypal conduct this? I have read horror stories where people have not received their money for up to 6 months and more, and where the buyer has received the item and still requested a refund (that is automatically granted by paypal) without the seller being compensated for the loss of the item they sold.

Any help would be appreciated as this hurts me financially, having to find money to send the goods to the buyer to start with and not getting the proceeds of the sale for an unspecified period of time an hoping the buyer is honest.



Hi Mikey,

Check this link out - its Paypal's policy on holding ebay payments and why it does it in certain situations. Looks like once you have been an ebay member for over 6 months or so and your feed back is good, then they will start releasing the funds earlier.

Yes generally the ebay dispute resolution system - upon which paypal's release of funds would hinge in certain circumstances is known to be quite buyer biased and unfortunately instances where buyers are dishonest do happen occasionally. That is the nature of the beast, they are the policies and if you don't like them I guess you can go elsewhere. Also same principle with paypal its policies are its policies and you can take or leave them. However I don't believe there is anything under the Australian Consumer Law that would prevent them operating their business in the way they do.