Dear Sir/Madam,

I was wondering if you could advise whether eBay’s policy to FORCE all
users to accept Paypal, and not allow them to use other reputable
companies such as Google, is legal?

I am aware that in Australia this practice was deemed as illegal as it
was against their anti-trust laws
(http://www.accc.gov.au/content/index.phtml/itemId/823668), and it is
also not being forced upon eBay’s american users.

Below are two emails I received after listing some items with eBay and
stipulating I did not want to accept Paypal. The details stipulating
the requirement for Paypal is at
http://pages.ebay.co.uk/help/policies/accepted-payments-policy.html.
This is different than their american site
(http://pages.ebay.com/help/policies/accepted-payments-policy.html).

As eBay provides a different service than what Paypal does (selling as
opposed to processing of payments), surely forcing users to accept
both should not be allowed?

Should you require any further details, please do not hesitate to contact me.

Thank you for your time,
Dr. Hasan.

One thing’s for sure, the more PayPal tie up with airlines and the like, the more chance of them coming a cropper.

Wonder if the airlines have to go through the anti-money laundering rigamarole after receiving £1,500 of payments? Or if it’s one rule for them and another rule for the little folks?

Businesses requiring a licence

You are likely to need a licence if you want to:

* sell on credit
* hire or lease out goods for more than three months
* lend money
* issue credit cards or trading checks
* arrange credit for others
* offer hire purchase terms
* collect debts
* help people with debt problems
* advise on people’s credit standing
* administer agreements (but do not collect debts) for creditors or assignees (from October 2008, you can apply for the licence from 6 April)
* help individuals to locate and correct records about their financial standing (from October 2008, you can apply for the licence from 6 April).

(Elements in bold by me as they are activities in which PayPal engages – particularly providing financial and credit information about PayPal customers, to eBay = a licensable activity)

In terms of are PayPal fit to hold a CCL – there are some interesting topics in this pdf document if reading it as a “disgruntled” PayPal customer.

Interestingly, that pdf document also details a reason why eBay UK needs at least a category C CCL – introducing customers to companies that offer credit (i.e. the PayPal credit card). This is because of the way eBay forces users to open PayPal accounts, as such it makes them fall under the requirement for a Cat C license to introduce consumers to a business (PayPal) that offers credit.

Also according to that document, the eBay UPI and NPB process could now fall under the need for a Cat D license for both eBay UK and PayPal UK (assisting individuals to negotiate and settle debts (i.e. unpaid auction wins or BIN purchases))

Regarding PayPal, the biggies of course are categories H1, H, and I – as evidenced by eBay statements to the ACCC, there is a clear separation of eBay and PayPal as bodies corporate, yet there is also a clear commercial agreement between them for the collection and distribution of credit-worthiness and similar data relating to individuals.

Both PayPal and eBay have need to hold CCLs with category H1 or H, plus I.

All the above does in this context is prove they both need to be licensed. Once licensed, they become subject to all the vagaries of the Consumer Credit Act and its amendments and revisions.

To make a consumer complaint against a trader, please call the Consumer Direct advice service on 08454 04 05 06 or visit the Consumer Direct website.

To report anti-competitive or other behaviour by a trader or traders, please contact OFT Enquiries and Preliminary Investigations Centre on 08457 22 44 99

For the OFT switchboard or to contact OFT Enquiries and Preliminary Investigations Centre via the switchboard, please ring 020 7211 8000.

For all enquiries, guidance on the work of OFT and to report anti-competitive or other behaviour by a trader or traders, please email enquiries@oft.gsi.gov.uk.

For all enquiries, guidance on the work of OFT and to report anti-competitive or other behaviour by a trader or traders, please write to:

Enquiries Unit
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London, EC4Y 8JX.

A map is available here – http://www.oft.gov.uk/shared_oft/about_oft/oftmap.pdf

UK Office of Fair Trading (OFT) portal page for Consumer Credit Licensing (CCL) and the Consumer Credit Act (CCA) 1974, 2006, and 2008 =
http://www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/CCA2006/

Ed