Posted in: Technology

Big PayPal Changes To Come, Hated Frozen Funds Policy Will Be Amended

big paypal changes

Big PayPal changes are coming, and the online payment processing service may placate more web users who have fallen afoul of the service’s much disliked “frozen funds” policy.

The big PayPal changes have been trumpeted by the service as “aggressive,” and while PayPal has taken much public flak for its propensity to freeze accounts and thus, often, all the money available to small-time businesses, that may be changing — Anuj Nayar, PayPal’s senior director of communications, said that the planned policy update would have a large impact on how people can expect PayPal to handle the circumstance.

Nayar told CNNMoney:

“These are not minor — these are aggressive changes … This is a fundamental shift in our business operations.”

So exactly how would the big PayPal changes affect you and your PayPal dealings — Nayar refused to say.

While not detailing the changes planned for instances of frozen funds, the PayPal exec did say that when the amendment hits, it will be easier for users to find a way out of the issue instead of languishing indefinitely without access to their money:

“We want to be clear about how people can get out of the [frozen funds] situation … We need to get better about helping people, or explaining why actions are being taken.”

CNNMoney spoke with one high-profile user of PayPal who had been negatively affected by the frozen funds problem — author Jay Lake, who had fallen afoul of the current rules when raising funds for cancer research.

Paypal Retailer Agreements

Lake, who has been diagnosed with advanced colon cancer, says the rules now — the ones not affected by the big PayPal changes — seem to make it virtually impossible to unfreeze funds in many legitimate situations:

“They wanted me to provide receipts, shipping information, business paperwork … That obviously didn’t apply to me, but there was no way to bypass the process. I called, and they said appeals take 24 to 72 hours to get going. I asked, ‘How I do prove I’m not conducting transactions?'”

Lake points out that given his high-visibility, a fix was more easily found, but average users won’t be so lucky. But of the impending big PayPal changes, Nayar assures frustrated users that “2013 is going to be the year that we fix a lot of those pain points.”

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29 Responses to “Big PayPal Changes To Come, Hated Frozen Funds Policy Will Be Amended”

  1. Mike Camire

    Nice for paypal to freeze accounts and collect interest on the money they should be paying out.

  2. Richard Martin

    When society becomes cannibalistic and feeds upon its own citizens like a cancer, it is doomed to extinction –

    Martin, a modern day philosopher.

  3. Louis W. Gordon Jr

    when bank transactions take seconds, it is clear paypal has been holding money back to draw interest on those funds. Technology is such that funds should be available minutes after they hit their accounts.

  4. Doug Tull companies like Ebay,, Amazon, PayPal, Facebook, etc. have very little respect for their customers or small businesses. They need more competition and they'll change their tune pretty fast.

  5. Drew Klaczynski

    Aggressive changes my ass. Their whole freeze fund policy was nothing more than throwing darts at names and then freezing money that rightfully isn't their's.

  6. Drew Klaczynski

    So basically it sounds like their going to freeze more peoples funds, but give them a way out that's probably not instant. So what your saying PayPal is…..your going to make more money now by screwing more people over but this time your going to give people a way out. That's suppose to make us like you more?

  7. Rick Blair

    Too little to late as far as I a concerned. I had used Ebay as a buyer and a seller for years and never had less than a 100% positive feedback, but for some reason they felt they needed to hold my funds which made it impossible for me to pay the shipping on the items I had sold. I was furious and called them and was told they could hold my money for 21 days and I was expected to ship and allow the customer to receive my product before I could be paid. I told them to go to walmart and tell them if you like the product you would come back in 21 days and pay for it and see how that goes. I may be a small seller, but I am honest and since I was not able to ship I had to cancel the transaction and send an apology to my customer. This made me look like a fool. I was lucky to have the card on my account expire at the time this was happening and paypal and ebay were unable to get the $7.88 the claim I owe them. I explained that if I don't get paid then they don't get paid. They have now frozen my account as a buyer and seller which as hurt them a lot more than it has hurt me. This has cost those idiots hundreds of dollars as I used to buy quite a bit on ebay. Now I have taken my business elsewhere. I don't miss them at all and if I did want to buy on ebay I could use my sisters or parents account. These people are not very good with customer relations.

  8. Mary A. Rye

    took PP 6 months to finally release my frozen money and they insisted on mailing a check to prove my address.

  9. Anonymous

    I agree with Rick's statement. In my case, I gave them the wrong bank account number. Called the immediately to fix it and was shuffled around. In the end it cost me over $50 as they processed the payment anyway. I was contacted as part of a class action suit against pp in 2007 and have not used them since. My credit card company protects me from this type of behavior. I don't care how much a site pushes pp's services, I don't use them – ever.

  10. Craig Zacker Zacarelli

    just more big business shenenigens…. they all think they can steam roll the little people but, they fail to realize that it is the same little people that got them going and keeps them going… Imagine what one week would be like to Ebay / Paypal if no one were to use either service? that includes logging on just to browse. maybe everyone with a paypal account should just close it out and say…Kiss it baby!

  11. Jim Castronova

    I have been buying selling coins on EBay since 2003 regularly and have never had a transaction or my money held for ransom like alot of people have. The influx of riff raff and fraudulent sales by the flim flammers out there has increased since both PayPal and EBay have initiated protected Purchase Policies, requiring them to scrutinize dubious or questionable amounts from low-feedback(25 sales or less) sellers and out of the blue transactions that fall into the high dollar arena.. from sellers who have no track record to back their credentials or their credibility. Recently, I had to call PayPal over 2 purchases from potentially fraudulent sellers. One delivered and had his funds released at the time I posted Positive Feedback and the other, this poser from Lima Peru, was the subjuct of a no item received case, which I had to wait 2 weeks from start to get my money refunded. If you've established yourself as regularly moving a particular kind of item and having no complaints against how you're doing business, you're likely to receive a courtesy call from them, rather than having your money held hostage. That said, they are not to be trusted to represent your interests at all. They have a relationship with E Bay that for all intents and purpose, is anti-trust material for the class-action oriented. They've gotten greedy, plain and smple… while we've gotten smart.. Use them when you have to..Try and not have to..there's more than one way to do business, but not with them.

  12. William Robinson

    they did the freeze on me a couple of times because I had not met their minimum amount of sales. I also have 100% feedback. ridiculous , as I had used pp several times previously and always gotten paid. I couldn't understand why now? I never knew you had to have a minimum of 100 sold items (so I was told) just ridiculous.

  13. Dante Scudella

    I sold an Xbox 360 bundle on eBay, my first time as a seller. Thinking nothing of it, the auction ended, the buyer paid and the money was transferred to my PayPal account. I went to transfer the money to my checking account but found that it was frozen. I mailed the package, paying out of pocket for USPS Priority shipping and waited. 3 days later the buyer got his package and left me positive feedback. I then waited another 6 business days (8 days including weekend) for my funds to become available for transfer. Then when I did transfer them it took them another 4 business days to post to my account. So from start to finish, PayPal had over $170 frozen for 16 days. I was pissed to say the least.

  14. David Rose

    pay pal always takes the buyers side do not sell overseas do not sell items that the buyer can subsitute a damaged one saying you sold it to them that way even with pictures and postal receits they will refund money to the buyer if you don't make him sign 4 it.Insure and charge your buyers so that when they steal from you you will get your money back from the post. don't seell to canada or any country that cant track pass the boarder (use ups fed-x,) let your buyers know it is ebay and paypal policies that make them have to use the more expensive service I have mailed packages with receits only to have ebay refund the money because it cant be tracked past the us post seller beware has become the slogan of ebay and paypal.

  15. Anonymous

    It sounds like the FTC should look into PayPal for their extortion tactics. I knew one marketer who had over $60K held back by PayPal for over a year.

  16. David Snider

    Obviously you dont know how to use ebay. There is an OPTION to pay for shipping once the funds for the purchase have arrived. So your whole story/diatribe of not being able to pay for shipping is a joke and meant for idiots to digest

  17. David Snider

    Why didnt you pay shipping through pay pal, its cheaper, plus you could have paid for shipping once funds were avilable? they have that option. maybe if you paid better attention, you wouldnt be pissed, to say the least

  18. Steph Murphy

    So what if your using it to donate to charities? That's mostly what I use pay-pal for.Are they freezing up the charity monies also?

  19. Steph Murphy

    and if your reply is only to be rude,please don't answer at all,Thank You

  20. Kirk Allen

    David Snider youre a F&*^@&(^#$ idiot , this is twice youve givin piss poor arrogant advice that is completely wrong. sorry but when your account is FROZEN you cant use it to pay for the shipping, you tool , maybe if you knew the definition of FROZEN this wouldnt be so hard for you . !!!!!

  21. Nancy Donaldson

    PayPal is terrible. Have been trying to help a seller get his money transferred since 12/23/12 and should have happened asap. About impossible to get them on a phone, so emails to computerized answer standard! I was twice on emails promised money had been sent and to where! Never showed up because they never mailed it. SO then,
    tried having it transferred to a bank, which they promised 7 days ago…still not there! Once ever get it, will never never use paypal again. I will take chances on o ther means of payments from customers and use CraigsList much more. PayPal is stealing sellers money just to hold to gain more interest and huge money problems to sellers.

  22. Nancy Donaldson

    Yes, Rick Blair, I can't tell you how many times, I have had to bring boxes and just Mail Myself and not use Ebay or Paypals shipping labels! Can have several hundred dollars sitting in Paypal , can't get it out, can't use it, promise to transfer it to a bank and don't, promise to mail to me and don't! So, I, seller, make sales, and my earnings sit in Paypal while they make % on it, and I don't. Have to pay out of pocket for all my own shipping and packing while PayPal collects it! I will never use PayPal again, take a credit card or even a personal check and wait for it to clear as that is what paypal does anyway. I do NOT hold this company in any trust or esteem..

  23. Coz Passalacqua

    Exactly the same as Rick Blair! With the exception that when I said on my EBAY account that Paypal was NOT my preferred means of payment. they cancelled my Paypal account. My EBAY feedback was 199% positive as well. I too have no idea nor would they tell me why they put a 21 day hold on my funds despite numerous requests for explanation.

  24. Rick Blair

    Yes David I admit I don't sell very often on ebay, but what I have done is 100% positive. I sold items a month earlier and did not have this problem. I should not have to read terms and conditions every time I do business with a company I have done business with before. If they were funds available for me to ship then they should have explained this to me when I called. None the less there is no reason for ebay or paypal to hold any monies between me and my customer. I resent your comment and if anyone on here is an idiot it is you. You and others like you are the reason companies take advantage of people to start with. We will see how long this policy lasts. I am sure I am not the only person who feels betrayed by ebay. And as I said before this hurts them a lot more than it hurts me.

  25. Anonymous

    David Snider – do you work for PayPal? Own shares in Ebay? STFU. Face it folks. PayPal IS NOT A BANK. They are not regulated. They demand extraordinary access to your personal information and then at a whim can keep the money they owe you without any interest payments to you. Just read their TOS. Basically, you will be lucky if PayPal forwards you money you are owed. I avoid them. They should be regulated by the government. I do not even purchase on Ebay because of PayPal. I agree with another commenter – the FTC should investigate them.

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