EOW Reflections: Accounts and funds frozen on online platform

Published 9 February 2024

What a week. What a fortnight.

Hundreds of sellers on one big online retail platform have been begging for our help to get their accounts reinstated and their funds released so that they can carry on trading. Their accounts have been frozen while VAT verification checks are carried out, but those checks are taking anything from a few days to several months and so there’s no money coming in in the meantime. And all say they had no warning, no notification and no consultation.

None of the sellers contacting us have objected to the verification being done. They all understand that it’s necessary to prevent fraud. However, we know that the checks can be done without firms having their accounts shut down. We know that many of the sellers affected aren’t making enough to be registered for or owe VAT.

Here we are with hundreds of people running small businesses unable to buy materials or pay their suppliers, facing making their people redundant, unable to take home a salary and so unable to pay their household bills. One woman talked about having four children she can’t feed. We have people unable to pay their rent or mortgage. We have some who have had to drop out of home purchases and one who has lost the sale of his business. The ripple affects from small businesses not getting the money that’s rightfully theirs, into their bank accounts when they expect it to arrive, have been writ large over the past two weeks. And it’s impossible to do anything about it other than appeal to the online retail platform to change their processes and let these people salvage businesses they’ve spent years building up. This isn’t just about businesses, it’s about lives.

I’m sure someone thought it was necessary to freeze accounts while the checks were being carried out. I’m sure no one did this maliciously. I’m sure this is about unintended consequences. However, once it becomes apparent that there’s a better way to do things that will save livelihoods and lives, please hold your hands up and put things back on track.

As I write the Small Business Minister is preparing to meet with the online behemoth involved so we can only hope for a good outcome. I’m worried that for many any change of approach will come too late. We could be seeing the impact of this for years to come as people grapple with trying to rebuild businesses, relationships, homes, families and mental health. Almost everyone in around 600 emails I’ve read talks about the stress, sleepless nights and the dire negative impact on mental health this is having.

Recovery is underway for some who have had accounts reinstated and funds released but recovery isn’t instant. The clock isn’t simply put back. Even those owed a few hundred pounds for a few days now feel nervous for the future and vulnerable to the decisions made by their bigger customers.

Give people notice so they can make arrangements. Ask questions before simply taking drastic action. Put good processes in place so as to mitigate disruption and risk. Make sure there are plenty of people on hand for businesses to contact and talk to if things do go wrong. It’s not rocket science. It’s treating people as human beings and not just numbers or cogs in a wheel. Please pay fair and square.