PayPal Faces Lawsuit For Freezing Customer Accounts and Funds (engadget.com) 53
Three PayPal users who've allegedly had their accounts frozen and funds taken by the company without explanation have filed a federal lawsuit against the online payment service. From a report: The plaintiffs -- two users from California and one from Chicago -- are accusing the company of unlawfully seizing their personal property and violating racketeering laws. They're now proposing a class-action lawsuit on behalf of all other users who've had their accounts frozen before and are seeking restitution, as well as punitive and exemplary damages. Lena Evans, one of the plaintiffs who'd been a PayPal user for 22 years, said the website seized $26,984 from her account six months after it got frozen without ever telling her why. Evans had been using PayPal to buy and sell clothing on eBay, to exchange money for a poker league she owns and for a non-profit that helps women with various needs. Fellow plaintiff Roni Shemtov said PayPal seized over $42,000 of her money and never got an acceptable reason for why her account was terminated. She received several different explanations when she contacted the company: One customer rep said it was because she used the same IP and computer as other Paypal users, while another said it was because she sold yoga clothing at 20 to 30 percent lower than retail. Yet another representative allegedly said it was because she used multiple accounts, which she denies.
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What's your point. It's still theft.
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Re: PayPal is not an BANK you lose NEXT! (Score:1)
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FYI, demanding any company for THEFT (stealing YOUR property) does NOT require that such company be a bank.
Imagine a garage station, you park your car and... they stole it from you.
This' the same: you have a money account, you have your money there and... they stole it from you.
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read the back of the parking ticket we can remove your car from our lot.
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Yes, but you cannot then keep the car locked up forever without giving the owner the ability to get it.
So if Paypal gave the money back to either one of the two parties (The one receiving or the one sending), it would be fairly ok. But now they just keep it.. so it is theft.
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Unfortunately, PayPal has been doing this for a couple of decades. If it hadn't been for somebody knowing a PayPal VP, it would have cost a few dozen of us hundreds of dollars each in an audio equipment group buy about fifteen years ago or so. (They eventually refunded the money, and we had to find a new means of transferring funds.)
I'm amazed this isn't a 10,000-person class action by now.
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Why do people keep that much money in a PayPal account that is not a bank?
It doesn't take very long at all to accumulate that kind of money when you run a business. Imagine you're selling $500 laptops. Adds up quick. And it doesn't matter if you transfer it to your bank account. They'll pull it right back.
"exchange" (Score:2, Insightful)
[Lena] Evans had been using PayPal to ... exchange money for a poker league she owns ...
She misspelled "launder."
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[Lena] Evans had been using PayPal to ... exchange money for a poker league she owns ...
She misspelled "launder."
That does not mean that Paypal gets to keep the money. Nor does it mean that they do not have to explain themselves. This has been a long time coming. It will be entertaining to watch.
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Never heard of "civil forfeiture" have you?
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Last I checked, private people (or companies, but stupid SCOTUS gave them personhood years back) cannot leverage civil forfeiture - only law enforcement can do that.
Otherwise you could literally steal anything and claim it's civil forfeiture just like the cops do.
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That does not mean that Paypal gets to keep the money. Nor does it mean that they do not have to explain themselves. This has been a long time coming. It will be entertaining to watch.
Agreed. My comment was meant as a joke as her stated usage sounds suspicious. It's my understanding that PayPal -- and other online entities, like Facebook and Google, etc... -- have a history of freezing/seizing accounts with no or dubious reasons offered and also having difficult (if any) process for getting information about and/or appealing those actions. That's obviously wrong and unacceptable.
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Yeah... while I am not a huge fan of many of Paypal's behaviors, I am also always a bit skeptical of people who claim that Paypal shut them down and seized tens of thousands of dollars for 'no reason'. People are always innocent when telling their story to a sympathetic audience.
Her activity seems like a "suspicious mob thing" and I was actually joking on that -- and got mod'ed down for my efforts; guess I needed the :-) (sigh).
In any case, I agree with your sentiment, but PayPal (and Facebook, Google, etc...) should provide clear reasons for account freezing/seizures and a well-documented process for getting information about the issue and appealing it. I know I'd be pissed is an account was disabled with no, or a dubious, reason offered and it was super difficult to more forw
Paypal hurts artists (Score:3)
I make tools for glass artists. Many of them make smoking pipes.Paypal treats them very poorly, taking their money and preventing them from selling a legal product
Re: Paypal hurts artists (Score:2)
15 years too late (Score:5, Interesting)
PayPal has been arbitrarily freezing accounts for at least 15 years, maybe 20. They froze one of mine back in 2004 or so just because I was making small payments of a few cents while testing out their API for an integration. Apparently that was somehow "suspicious". This was before they even had an API for testing, or if they had one they hid it well. I only had about $20 in the account and and was so angered that I never submitted the docs they requested, abandoned the account and integration, and swore never to give PayPal another dime.
But anyway, sites like paypalsux.com and paypalwarning.com existed even back then with thousands and thousands of complaints from people with frozen accounts, and PayPal's lack of customer service is also legendary.
I am amazed there has not already been a successful class action lawsuit. Or maybe there has...?
Anyway, I support this effort.
Re:15 years too late (Score:5, Interesting)
Paypal has a policy now of "permanent banning" which seizes all assets in an account and have the extremely useful policy (for Paypal) of not only having no appeals process but also being very aggressive about never giving any information at all to explain the ban. They will give you no information at all, and state that they never will, and if you ask a CSR for information with will be directed to a page that declares the only way to find out why you were banned is to file a lawsuit.
Googling about such lawsuits will show that these individually filed lawsuits never get any information either. Hence this class action lawsuit.
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Googling about such lawsuits will show that these individually filed lawsuits never get any information either.
I tried, but most of the links on Google are about this story.
I moved from Paypal to Stripe (Score:2)
Not because the stole my money (I never let it accumulate there) but because Paypal started declining a lot of my very respectable customer's payments.
Stripe also has decent customer support, vs Papal zero. I think Papal will fade away.
But for the other, it is one thing to close an account arbitrarily. It is quiet another to keep the money. Even if the T&Cs say they can do whatever they like.
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PayPal also wants to connect to your bank which I refused to do.
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This is why you never keep funds in your PayPal account. Withdraw them immediately.
Now that eBay has ditched PayPal, that is much easier to do.
In Europe there is one advantage if you pay for stuff with PayPal - their return policy is better than most retailers.
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Nothing new here (Score:2)
Paypal has long been fighting (and winning) that it it not covered under bank regulations.
https://www.cnet.com/news/feds... [cnet.com]
"PayPal does not physically handle or hold funds placed into the PayPal service," the FDIC said in its letter.
This is from 2002, now nearly 20 years ago. This distinction has become more and more meaningless as the years go on. Its high time that paypal fall in line with banking regs.
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> "PayPal does not physically handle or hold funds placed into the PayPal service,"
Neither does a bank. It's all ones and zeros in a computer's memory.
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Crypto (Score:2)
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This is exactly why crypto should have caught on. Yes, crypto has many flaws, but it doesn't let some tech company middleman steal from you.
Think so, eh? Once someone has hacked your wallet and cleaned it out tell me how great it is. It happens all the time. They're even stealing NFTs. Thief is a thief after all. Thug on the street with a gun or a thug dressed in a 3 piece suit and a briefcase. The thug with a briefcase can steal a lot more from you than the guy with a gun.
Did the people get their money back? (Score:3)
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for many of my friends, paypal kept the money for ever.
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PayPal kept it. (Score:2)
Is PayPal freezing the funds for some duration, and then ultimately returning the funds to these people, or is PayPal actually keeping the funds indefinitely?
According to TFA, PayPal told one of the plaintiffs that: