YouLend Deductions on Cancelled eBay Orders – Misrepresentation of Financial Product?

[bande_uk]

I am raising this issue publicly in the interest of transparency and collective awareness.

I currently have a revenue-based funding agreement with YouLend through eBay, whereby a percentage of completed sales is deducted automatically to repay the advance. This is standard practice under such arrangements and clearly described as a “percentage of sales.”

However, I have now had multiple instances where YouLend deducted their percentage on orders that were cancelled before dispatch and before payout. In each case:

• The buyer placed an order,

• I cancelled it prior to dispatch,

• eBay refunded the buyer,

• But YouLend still received a payout based on the gross order value.

To be clear: I did not receive funds from these orders, and they were not fulfilled. Yet I was financially penalised as if I had completed the sale.

I raised this with both eBay and YouLend. So far, both parties have largely passed the buck – YouLend stating that “they only take what eBay sends,” and eBay suggesting I deal directly with YouLend. Neither has issued a refund, nor provided a clear explanation.

This raises some serious concerns:

🔹 Is this a breach of FCA rules around misrepresentation of financial product terms?
🔹 If the agreement is for a “percentage of sales,” why are deductions made on cancelled transactions?
🔹 How many sellers are unaware this is occurring?
🔹 Is this being reported or disclosed properly in financial documentation?

I am currently preparing a complaint to the Financial Ombudsman Service, but I’d be very interested to hear from other sellers. If others are experiencing this, the case for systemic misapplication becomes stronger.

If you've encountered the same issue – deductions taken on cancelled orders – I encourage you to respond or message me directly. We may be in a position to escalate this collectively.

Kind regards,
Brian

[therenewalworkshopltd]

I'm not entirely sure that they are incorrect in doing that.

If you think about it, when the order is made, the buyer pays and the amount goes into your account balance.

So at that point, you HAVE had the money.  Just because it's not been sent to your bank account yet, does not mean that you haven't.

If the order is then cancelled, then why would they refund that part of your payment, which you have already agreed to?

I agree with you that it's a little unfair, but you did sign up to payments being taken from the orders and that is exactly what they are doing.

However, I honestly think that you have a cat's chance in hell of getting anywhere with it as it seems pretty clear to me, that they are doing exactly what it says on the tin.

[bande_uk]

Thanks for your reply — and I do see where you're coming from.

But here's the problem: eBay/Youlend's own wording refers to a percentage of sales — not a percentage of orders placed. A sale that gets cancelled before dispatch, before payout, and never fulfilled isn’t a sale in any real-world business model.

The issue is that eBay deducts the YouLend cut the moment an order is placed, before it's clear the order will even go ahead. If the order is cancelled (as in my case), YouLend still gets their percentage, and the seller is left out of pocket for a transaction that literally never happened.

That’s not "a bit unfair" — that’s misrepresentation of the financial product. Imagine taking a card payment in a shop, the customer cancels before you hand over the goods, but your payment processor still takes a fee as if the sale was completed.

I’d argue this isn’t what it “says on the tin”, and if it is, that tin needs reporting to the FCA for misleading labelling.

Is anyone else seeing the same pattern? Because if this is systemic, we may need to escalate it as a group.

[therenewalworkshopltd]

Ok, but it is a percentage of sales.  It's not a percentage of an order placed.

You have been paid for said order.

An order placed, would be an order that has not had payment or only a deposit perhaps.

You can't however compare this to a sale in a shop, that is not what is happening as this transaction is distance selling.  The same laws do not cover that.

If your not aware, this is actually exactly the same way that Amxzxn deal with sales.
All their reporting treats cancelled sales as sales.  So it's fair to say, that it's going to be an industry standard.
In just the same way, that VAT is calculated on those sales.  Especially if you don't get back all of the fees, as then the VAT will actually be charged/refunded.

But honestly, unless you are getting a lot of cancelled orders, then it really shouldn't make much a difference overall anyway.  And seems to be an awful lot of hassle, just for the occasional order.

But, if you want to pursue it, go for it.  I really don't think that you will get very far though.

[bande_uk]

Thanks for your reply, but there are a few important points worth clarifying.

This wasn’t a minor refund—it was a large order that left me substantially out of pocket. And to be clear, the same thing happened again this morning on a smaller scale, after YouLend told me explicitly that this shouldn't happen. So it’s not hypothetical—it’s recurring and it's costing real money.

Let’s tackle the core issue: YouLend deducting a percentage of “sales” before those sales are actually fulfilled or completed. That’s the problem. I agreed to a revenue-share on actual earnings—not on transactions that are later cancelled and refunded in full.

The buyer never received the goods, I never received a payout, and yet YouLend still took their percentage as if it was a completed transaction. That’s not a revenue share. That’s charging for ghost income.

Now, on your point about distance selling—this actually makes no difference here. The fact it's distance selling does not mean funds that were never realised or settled can be treated as completed revenue. If anything, distance selling regulations strengthen the consumer's ability to cancel pre-fulfilment, which makes it even more critical for platforms like eBay (and partners like YouLend) to handle the financial side responsibly and transparently.

This is not about the occasional order—it's about systemic behaviour that could easily scale into major losses over time, especially for small sellers with tight cash flow. It’s not just about whether others do it—it’s about whether it’s being done lawfully and fairly. I've already taken advice, and let’s just say this is far from settled.

I’ll be pursuing this—and encouraging others to check whether it’s happened to them too. Because if this is quietly becoming “industry standard,” then it’s time to push back.

[4_bathrooms]

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@bande_uk wrote:

Let’s tackle the core issue: YouLend deducting a percentage of “sales” before those sales are actually fulfilled or completed.

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As always, it pays to read the terms and conditions/FAQs before committing to these sort of finance agreements:

Gross sales are all sales before any deductions (deductions include cancellations and returns). If it said "net sales" you would have had a valid complaint.

[bande_uk]

Thanks for pointing me to the T&Cs. I’ve read them carefully, and I understand the difference between gross and net sales. But the problem here isn’t semantics — it’s the timing and logic of the payments.

YouLend taking a cut on sales before they’re actually completed and paid for, when cancellations happen, is fundamentally flawed. That means I’m out of pocket on orders that never materialised. That’s not standard business practice — it’s cashflow sabotage.

If the contract explicitly allowed this, it would be spelled out clearly. It isn’t. This is why I’ve sought legal advice.

For many sellers like me, this isn’t a trivial amount — it’s real money, and it threatens the viability of the business.

I’m not disputing the principle of finance companies taking a percentage of sales — but only on actual sales, not phantom ones.

If this is “industry standard” as claimed, then it’s an industry problem that deserves scrutiny, not dismissal.

[4_bathrooms]

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@bande_uk wrote:

YouLend taking a cut on sales before they’re actually completed and paid for

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Once a buyer has paid it becomes a gross sale; due to Managed Payments buyers are required to pay upon placing their order in almost all cases. It doesn't matter when or why an order is subsequently refunded; it became a gross sale upon payment by the buyer.

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@bande_uk wrote:

If the contract explicitly allowed this, it would be spelled out clearly. It isn’t. This is why I’ve sought legal advice.

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To me, it is spelled out clearly but please keep us updated with your progress.