The FSU’s legal battle against PayPal – an update

The FSU is continuing its fightback against PayPal following the company’s attempt to demonetise us last year.

The FSU is continuing its fightback against PayPal following the company’s attempt to demonetise us last year. In a bid to find out why our account was suspended without prior warning, meaningful explanation, or recourse to a proper appeals process, we’ve engaged in lengthy legal correspondence with PayPal. Sadly, the company that professes on its Twitter page to be “open for all” has decided to adopt a policy of non-engagement, so our next step will be to write formal letters of complaint to the Financial Conduct Authority and the Competition and Markets Authority.

As it happens, PayPal’s decision to give us the brush-off is a useful piece of intel, not least because the Government has just begun its review of the UK Payment Services Regulations. In the review’s accompanying ‘call for evidence’, the Government makes clear its view that “as a minimum” and “without deviation, a notice-period and fair and open communication with a customer must apply in situations which relate to termination on grounds other than suspected or actual criminal offences, or when otherwise allowed by law”. It goes without saying that the FSU’s view of PayPal’s approach to “fair and open communication” will be included in our submission to the government consultation.

Speaking of which, the FSU needs your help to make its submission as compelling as possible. We’re looking for examples of politically motivated financial censorship that you, or anyone you know, may have experienced or heard about. Many of our members and supporters will know the backstory to this public consultation.

In the wake of PayPal’s attempt to deplatform our organisation, Sally-Ann Hart and Andrew Lewer tabled an amendment to the Financial Services and Markets Bill. The amendment addressed “refusal to provide services for reasons connected with freedom of expression” and stated that: “No payment service provider providing a relevant service may refuse to supply that service to any other person in the United Kingdom if the reason for the refusal is significantly related to the customer exercising his or her right to freedom of expression.”

However, the amendment was withdrawn after the City Minister, Andrew Griffith, promised Ms Hart and Mr Lewer that the issue they were seeking to address would be included in the terms of reference of a forthcoming statutory consultation about the Payment Services Regulations.

All of which brings the story up to date – and with the consultation having now begun, it’s great to see that it will cover the regulatory framework currently applied to over 1,000 firms authorised as payment and e-money services in the UK. The existing rules, which Britain adopted when it was part of the EU, already require payment companies to give customers notice when they terminate an account. But, as per the agreement with Ms Hart and Mr Lewer, the Review will now assess whether clearer guidelines are needed on when companies can withhold or withdraw services from customers and will pay particular attention to the issue of politically motivated financial censorship.

We think this could be an important moment – the Government appears keen to keep an open-mind on the matter, which means there’s now a window of opportunity for us to shape an aspect of public policy that will help to check the creeping trend towards a Chinese-style social system in countries like ours.

On the subject of the Government’s open-mind, it’s particularly encouraging to see in the consultation that the Government makes it “very clear” that “the legitimate expression of differing views, is an important British liberty”, that it “does not support ‘cancel culture’” and that “regulations must respect the balance of rights between users’ and service providers’ obligations, including in relation to protecting the freedom of expression of anyone expressing lawful views”.

In order to provide the Government with as many instances of financial censorship as we can, we’re asking our members and supporters to send us any examples they may have come across, particularly if it involves them. To be clear, we’re after examples of financial services companies (such as high street banks), payment processors (like PayPal) and crowdfunding platforms (IndieGoGo) either withholding or withdrawing services from customers because they disapprove of their perfectly lawful views.

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