I look at these very forum messages where people complaint about the way they have been treated by Paypal, whilst some just complain, others take county court action for recovery of funds, and others complain to the Financial Services Ombudsman, both of which are appropriate action for people to take. But to be honest that is not the answer, as it does not resolve the overall problem, Paypal continues to act as a bully in the way it treats its customers. In any event even with a court order in your favour it creates no precedent as one county court is not bound by the decision of another. The answer is to take the case through the High Court, but as most claims are for small sums then seeking a claim for the money owed would force you back into the small claims court, even if you were lucky enough to get it into the High Court Paypal would prevent you gaining a significant cost order in your favour by paying into court the money you allege is owed.

Therefore the answer is to seek a declaration from the High Court without a monetary claim, that is a direct challenge to the rules and procedures that they use to determine a complaint. In other words are these practices and rules in accordance with UK law.

In my own case the sum is a mere 20.25, but this is the second time that they have done this to me, that is the buyer, fails to give the full or correct address, you post to the address that they supply by first class post and obtain the postal receipt. The Post Office either then delivers the item to the wrong address, or more precisely the address given by the buyer, or it goes into the pile of 250,000 lost packages that the Post Office accepts are lost every year, but in any event it is not returned to the seller. He then files a complaint to Paypal, who fails to investigate by seeking a copy of the postal receipt, and finds in the buyers favour. You are then out of pocket not only the 20.25 but also the Paypal fee which they do not return to you. in addition to this as a Paypal Pro customer they also keep the standard 5% against chargebacks for the 90 or so days, so whilst they are holding that sum they are effectively holding it twice.

So I am now working on the case I shall lodge, first with a Pre-Action Protocol letter, and then the actual basis of the case. I shall also lodge separately a monetary claim against the buyer to recover the money I am out of pocket. But my claim against Paypal will be lodged in the Weymouth District Registry as a delaration, not for the recovery of any money, for those reading this who do not know what a declaration is, this is an application to the High Court to answer a number of questions of law. Therefore it is only a challenge to the procedures and not a claim in damages, but the important thing is that win or lose it would set a precedent that would then unless it is over turned by a higher court apply throughout England and Wales. The idea is to have a High Court judge rule that Paypal is acting unlawfully, which would then open up the flood gates to thousands of claims, but equally if it goes the wrong way then it could shut gates. Therefore before I actually go forward I want to make sure that there is a greater chance of success than failure.

As part of this I need to hear from others with similar grievances not to be part of the challenge (I don't want to start an expensive class action), but to supply witness statements of their own problems with Paypal (but only from those with UK Paypal accounts), and its procedures for investigating complaints, and potentially have a few people then be witnesses to the way that Palpal treats its customers in the dispute resolution process. I am very concerned that I do not create bad law by a wrong decision, therefore I also welcome comments on what I am proposing.

Chris Maile