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I am asked, with growing frequency, to advise UK-established Amazon sellers whose accounts have been deactivated and whose trading funds have been withheld by Amazon Payments UK Limited (“APUK”) for periods extending well beyond the 90-day window contemplated in APUK’s standard terms. In most cases, sellers have not received a substantive explanation for the retention of their funds, other than a generic reference to a review, an instruction reportedly from Amazon Services Europe Sàrl (“ASE”), and the use of broadly drafted suspension and restriction clauses in the Selling on Amazon Payments User Agreement.
This section outlines the contractual situation and explains why Amazon’s typical defence is weaker than it appears.
APUK habitually relies on two clauses in the User Agreement: the suspension clause (historically section 5.3, allowing APUK to suspend the service and block access to the account where, among other things, the customer has provided incomplete or inaccurate information), and the restriction clause (historically section 2.7, allowing APUK to limit access to the merchant account balance for such time as it reasonably deems necessary). These clauses are broad, but they are not unlimited.
Reasonableness. The restriction clause is “reasonably deemed necessary”. That is an objective standard, not a licence for indefinite retention. APUK has held funds for one, two, or three years without ever articulating the concern that justifies it, so the reasonableness requirement is not satisfied.
Good faith. In a long-term commercial relationship of this type, a regulated payment service provider holding a merchant’s trading proceeds and retaining funds without explanation and failing to engage substantively with the customer’s correspondence contradicts that duty.
The ASE/APUK split: APUK’s stock defence is that the operational decision to suspend was made by ASE, a Luxembourg entity outside the Financial Conduct Authority’s perimeter, and APUK is therefore not responsible. The Financial Ombudsman Service has now rejected that argument in decisions issued by five different Ombudsmen. APUK is the FCA-authorised payment institution that holds the funds; it cannot disclaim responsibility for the consequences of pointing at a corporate affiliate. We expect a court to take a similar view.
Unjust enrichment
Where money is held by APUK for an extended period with no lawful or contractual justification, the seller has a respectable claim to unjust enrichment for the time value of those funds. The contractual exclusion clauses on which APUK relies—directed at consequential losses, such as lost sales—do not comfortably defeat a restitutionary claim of this kind. The Ombudsman’s standard remedy of 8% simple interest from the date the funds should have been released serves as a useful benchmark for measuring recovery, although a court is not bound by it.
The Payment Services Regulations 2017
APUK is authorised under the Payment Services Regulations 2017 and subject to the safeguarding obligations outlined in Regulation 23. The interaction between those statutory duties and APUK’s asserted contractual right to retain customer funds, on behalf of an unregulated affiliate and without explanation, is—so far as we are aware—not yet the subject of any reported judgement. It is precisely the kind of point on which a high court determination would be valuable, not only for the immediate claimants but also for the wider community of UK Amazon sellers.
Jurisdiction over ASE
ASE is incorporated in Luxembourg, and its user agreement contains a Luxembourg jurisdiction clause. We do not pretend that joining ASE English proceedings is straightforward. There is, however, a properly arguable route under the CPR Practice Direction where ASE is a necessary or proper party to a claim correctly anchored against APUK in England. The point must be argued and can be addressed as a preliminary issue; however, it does not prevent the claim against APUK from proceeding in this jurisdiction.
Why a coordinated claim
A single-claimant action against Amazon is, candidly, an unattractive proposition. The costs are heavy, the defendant’s resources are effectively unlimited, and the disclosure burden falls disproportionately on the claimant. A coordinated claim brought by a meaningful cohort of sellers—chosen so that the lead claimants between them cover the principal fact patterns we see (VAT establishment, authenticity and counterfeit allegations, KYC documentation disputes, and verification interview failures)—is materially stronger. It spreads cost, it improves the prospects of a global settlement, and it puts the central legal questions in front of the court in a form that produces precedent useful to every affected seller.
Risks
Candour requires us to flag them. Jurisdiction over ASE will be contested. The contractual clauses are real, although not as wide as APUK would have them. Limitations under the Limitation Act of 1980 will cut off the oldest claims. APUK may produce confidential evidence for the court—as it has for the Ombudsman—that affects individual claimants’ positions. And the cost asymmetry between a seller cohort and the Amazon group is significant. These factors highlight the importance of pursuing the claim carefully, within a structured cohort, and with adequate funding.
If your account has been deactivated
If you are a UK-established Amazon seller whose selling account has been deactivated and whose trading funds are being held by APUK without release, we would like to hear from you. The earlier you make contact, the better placed we are to assess limitations, gather the documentary record, and consider whether your case fits within the cohort we are assembling.
Please contact Michael Coyle at michael.coyle@lawdit.co.uk or via the Lawdit contact form at lawdit.co.uk.
