Amazon Sellers Unite: Legal Action Over Fund Freezing.
Amazon sellers are currently preparing to initiate legal proceedings in the United Kingdom against the American e-commerce behemoth, alleging that it has unlawfully frozen tens of millions of pounds in their sales proceeds. The objective of this legal action is to secure compensation for the affected sellers and compel Amazon to release their funds.
Sellers whose accounts remain frozen are strongly urged to visit the designated page to learn more and provide their information to participate in the legal initiative.
There are approximately 100,000 sellers operating within Amazon’s UK marketplace, encompassing both established enterprises and individual traders. Numerous sellers have expressed their grievances in Amazon’s Seller Central chatroom and on social media platforms, asserting that their funds have been unjustly frozen by the company.
Frozen Amounts
The frozen amounts represent the proceeds from sales that sellers have generated through their products. These funds are crucial for maintaining cash flow and sustaining business operations. Sellers contend that their funds are often frozen on unfounded and erroneous grounds, such as the need to update VAT information.
Some sellers have reported having nearly £300,000 frozen by Amazon, with the total amount of funds improperly withheld expected to reach tens of millions of pounds. Frequently, sellers receive minimal information following these actions, despite their efforts to engage in good faith by submitting letters, evidence, and numerous emails.
Amazon's Actions
The repercussions of Amazon’s actions extend beyond financial damage; they are also inflicting significant emotional distress on sellers. In a situation reminiscent of the Post Office scandal, many find themselves ensnared in an automated appeals process with Amazon.
Several sellers have taken to Amazon’s own forums to share their struggles, indicating that they are facing bankruptcy due to the company’s unilateral decision to freeze their accounts. Tragically, some sellers have reported experiencing suicidal thoughts after enduring months of attempts to access their hard-earned funds.
The initiatives undertaken by former enterprise minister Kevin Hollinrake MP brought attention to this matter in February 2024. Nevertheless, sellers are still experiencing unlawful withholding of their funds by Amazon. In 2023, Amazon's sales in the UK exceeded £25 billion, benefiting significantly from its sellers. While the amount of money frozen may appear negligible to a multi-billion-dollar corporation like Amazon, it is crucial for sellers to support their families and is vital for the survival of their small enterprises.
Rosenblatt representing affected sellers
Dean Nicholls, Partner at Rosenblatt representing affected sellers, said:
“Amazon’s agreement with its sellers has very clear rules for what it can and cannot do. We believe that Amazon’s treatment of so many of its sellers is a clear breach of that agreement.
We encourage all sole traders and businesses that sell goods on Amazon in the UK to consider joining our legal action to fight for compensation if their funds remain unlawfully frozen.”
If you are an affected seller, please submit your information here at no financial obligation by clicking here.
