EBay's PayPal funds freeze plan draws fire

By Kathleen Ryan O'Connor

(FORTUNE Small Business) -- In the uproar that erupted over the planned fee hikes and other policy changes eBay announced last week, one drew particular ire and incredulity: eBay's plan hold payments sent through its PayPal payment service for up to 21 days in certain circumstances.

The freeze will apply to transactions eBay (EBAY, Fortune 500) considers high-risk, and is intended to protect buyers from the hazards of a bad transaction. By hanging on to funds, eBay can easily refund them if a seller doesn't ship a purchased item or sends damaged goods.

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