Where’s our money? Merchants suing Amazon for withholding payment

amazon-logoAmazon.com is under some serious scrutiny from small merchants who claim the Seattle online giant withheld money from them and used it for securities and investments.

The Seattle Times reported about the class-action lawsuit filed this afternoon against Amazon. Two small merchants selling DVDs and flight training materials claim that Amazon did not pay them after 90 days and broke its own terms of agreement, as well as Washington state law.

The Times has been following the story since last fall, when it found several third-party sellers who had been withheld payment for extended periods of time.

Merchants must sign a participation agreement that allows up to 90 days for Amazon to pay out earnings. The DVD seller claims Amazon held hundreds of dollars for 98 days, while the flight training merchant didn’t receive money for more than 100 days.

The suit actually claims that the participation agreement “states a date for the transmission of payments that exceeds the time limit established by Washington law.”

The suit also states that from the money that Amazon holds on to, it “keeps the interest and other gains generated by the funds owed to the Plaintiffs and the Class and utilizes the available cash in its business.” The suit says that “Amazon has reaped and continues to reap many tens of millions of dollars annually from this practice.”

The merchants are seeking interest and damages on top of the original amount they feel they are owed.

Previously on GeekWire: Amazon downgraded by JP Morgan over slower growth

  • TheEnragedHippoo

    Can you guys help me with this too. I am going to sue Amazon as well for holding the funds that I got from selling my iPhone 5 successfully. I have been under “review” for 120 days and I am tired of their shit, They give me excuses and emails to contact, but it’s all baloney. Some one help : (