Not upheld: Card / payment disputes complaint against PayPal UK Ltd

Decision detail

Summary

Miss B sold cryptocurrency and received payment into her PayPal account. The buyer subsequently raised chargebacks with their bank, and PayPal refunded most of the payments, leaving Miss B with a negative balance. Miss B complained that she should not be liable for this money and that the seller protection exclusion for cryptocurrency was not sufficiently prominent. The ombudsman found that PayPal does not control the chargeback process and must comply with card scheme decisions. Cryptocurrency transactions are explicitly excluded from seller protection as equivalent to cash and financial products, and this exclusion was clearly stated in PayPal's user agreement. Without access to messages with the buyer, the ombudsman could not establish that goods were exchanged. Therefore, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that PayPal does not control the chargeback process and must comply with card scheme decisions. Cryptocurrency transactions are explicitly excluded from PayPal seller protection as they are equivalent to cash and financial products. The exclusion was clearly stated in PayPal's user agreement, which was accessible and prominent. Miss B, as a seller, should have been aware of or made herself aware of the specific terms applicable to sellers. Without access to messages exchanged with the buyer, it was not possible to establish on balance that goods were exchanged for the money that was later charged back. Therefore, it would not be fair to require PayPal to refund Miss B.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website