You are going through one of the most disastrous business situations a small business can encounter if you sell on Amazon and your account has been suspended. Amazon’s warehouses hold your inventory. Customers are unable to contact you. Additionally, the money you have already earned—up to tens of thousands of pounds—is locked in an account that you are unable to access. I have personally answered dozens of emails and about twelve calls from people who have all encountered similar issues.
Complaining is the natural reaction when this occurs. Many sellers do this directly or indirectly through solicitors, and the Financial Ombudsman Service is the obvious choice in the event that Amazon’s own appeals procedure is unsuccessful. (‘FOS’)
https://www.financial-ombudsman.org.uk/
The Financial Conduct Authority (FCA) regulates Amazon Payments UK Limited (APUK). It holds your money. It is squarely within FOS jurisdiction. I looked at eight decisions issued between mid-2025 and February 2026; all reached the same conclusion: Amazon Payments UK Limited acted fairly and is not required to take any further action. In six of those eight decisions, the same ombudsman delivered the same finding, using substantially the same paragraph structure.
So let’s take a look: –
| Decision | Seller (anon) | Issue | Funds Withheld | Ombudsman | Outcome |
| DRN-5766144 | B | UK establishment / VAT | Not stated | Colin Brown | Dismissed |
| DRN-5781043 | Z | KYC / IPI outstanding | Substantial | Colin Brown | Dismissed |
| DRN-5806266 | M | UK establishment / VAT | Not stated | Colin Brown | Dismissed |
| DRN-5813927 | Z | KYC / account closed | Not stated | Laura Colman | Dismissed |
| DRN-5827353 | H | KYC / deactivation | Not stated | Tara Richardson | Dismissed |
| DRN-5844016 | Y | IPI refusal (since 2021) | Substantial | Colin Brown | Dismissed |
| DRN-5860997 | S | Policy violation / IPI | Substantial | Colin Brown | Dismissed |
| DRN-5893962 | N | KYC / policy violation | Inc. £2,800 fee | Colin Brown | Dismissed |
To understand why sellers continue to lose at the FOS, you need to understand how Amazon’s UK seller operation is divided between two separate legal entities.
When you set up an Amazon seller account, you enter into two separate contracts simultaneously.
Contract One is with Amazon EU Sàrl (‘AEU’), a Luxembourg-registered company. This is the marketplace contract. AEU controls your listings, sets the platform rules, conducts account reviews, and decides whether your account complies with Amazon’s policies. Crucially, AEU is not regulated in the United Kingdom. The FOS has no jurisdiction over it whatsoever. AEU is not an SRA-regulated law practice, although it does have an SRA ID, 566771. Its address is 5 Rue Plaetis, L-2338, Luxembourg, Luxembourg
Contract Two is with Amazon Payments UK Limited (“APUK”), an FCA-authorised payment institution registered in England. APUK holds the suppliers’ money. It is the only entity that can freeze or release the funds in your Seller Central account. Because it is FCA-regulated, sellers can bring complaints about it to the FOS.
The structure appears straightforward. In practice, it creates an impenetrable loop which seemed to be on loop when I looked at the 8 decisions.
- A seller’s account is suspended, and funds are frozen.
- The seller complains to the FOS about APUK, the entity that holds the money.
- APUK tells the FOS: the funds are withheld because AEU has identified an unresolved dispute.
- The FOS asks whether the dispute is real. APUK says AEU says it is.
- The FOS says, ‘We cannot investigate AEU.’ We can only look at APUK. APUK followed its contract. Complaint dismissed.
The APUK Selling on Amazon User Agreement (last updated 1 February 2021)
This document is the actual contract between sellers and Amazon Payments UK Limited. Section 2.7 of this document is titled “Disbursements”, and it is the clause every FOS ombudsman has been quoting. The relevant withholding language reads:
“We may restrict transactions to or from your account or limit access to and availability of your account balance in such amounts and for such time as we reasonably deem necessary to protect us or other users if: (a) we are subject to financial risk… (b) we suspect you have violated any term of this Agreement; (c) we are unable to verify your identity; (d) any dispute exists involving your Account or transactions conducted in connection therewith; (e) your Bank Account does not comply with any conditions for acceptance… or (f) needed to protect the security of our systems. We may restrict access to your account balance for the time that it takes for us to complete any pending investigation or resolve a pending dispute.”
The Funds Disbursement Eligibility Policy
This is a separate Amazon policy document, published on Seller Central, not in the User Agreement itself. This is the document that contains the much broader language that several FOS decisions have also quoted — the language about withholding funds for “deceptive, fraudulent, harmful, or illegal activity” and “non-monetary damages inflicted on Amazon”.
The FOS ombudsmen in at least three decisions (DRN-5781043, DRN-5844016, and DRN-5860997) quote both section 2.7 of the User Agreement and the Funds Disbursement Eligibility Policy and treat them as consistent with each other.
It cannot be underestimated as to the number of disgruntled calls I am receiving, and I have no idea as to how much money has been withheld, but surely from a legal standpoint we need to do something?
We need to file a claim in the High Court. Interested parties, please send me an email to michael.coyle@lawdit.co.uk
