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PayPal faces lawsuit for freezing customer accounts and funds

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PayPal faces lawsuit for freezing customer accounts and funds

Old 01-15-22, 08:56 PM
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PayPal faces lawsuit for freezing customer accounts and funds

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. 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.

Shbadan Akylbekov, the third plaintiff, said PayPal seized over $172,000 of his money without giving him any explanation why the account got limited in the first place. Akylbekov used the account of a company his wife owns to sell Hyaluron pens, which are needle-less pens that inject hyaluronic acid into the skin. After the money disappeared from the account following a six-month freeze, PayPal allegedly sent his wife a letter that says she "violated PayPal's User Agreement and Acceptable Use Policy (AUP) by accepting payments for the sale of injectable fillers not approved by the FDA." It also said that the money was taken from her account "for its liquidated damages arising from those AUP violations pursuant to the User Agreement."

PayPal has long angered many a user for limiting accounts and freezing their funds for six months or more. One high-profile case was American poker player Chris Moneymaker's who had $12,000 taken from his account after six months of being limited. Moneymaker was already in the process of asking people to join him in a class action lawsuit before his funds were "mysteriously returned."

Part of the complaint reads:

"Plaintiffs bring this class action against Defendant PAYPAL, INC. ("PayPal") to recover damages and other relief available at law and in equity on behalf of themselves, as well as on behalf of the members of the class defined herein... This action stems from Defendant’s widespread business practice of unilaterally seizing funds from its clients’ financial accounts, without cause and without any fair or due process.

PayPal places a "hold" on Plaintiffs' own funds in their own PayPal accounts. PayPal has failed to inform Plaintiffs and members of the class of the reason(s) for the actions PayPal has taken, even telling Plaintiffs and members of the class that they will "have to get a subpoena" to learn the simple information as to why PayPal was holding, and denying Plaintiffs, access to their own money."

Source
There are tons of eBay users upset that eBay no longer uses PayPal to send the funds you made from sales since eBay now uses Managed Payments. But this article will show you that PayPal is not that completely safe and is just as corrupt (if not worse) than eBay.
Old 01-15-22, 09:55 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I've hated Paypal ever since they instituted their "we believe the buyer always" policy on eBay. Hope this bites them in the ass.
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Old 01-16-22, 09:42 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Anyone upset at this has no idea how much more widespread this problem is. I wouldnít be surprised to learn that PayPal has tens of thousands of accounts with the same problem. Iíd be surprised if it is less than that.

Most people who have their money seized by PayPal will eventually give up and move on.
Old 01-16-22, 11:20 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by Draven View Post
I've hated Paypal ever since they instituted their "we believe the buyer always" policy on eBay. Hope this bites them in the ass.


And who in their right mind would keep $172,000 in their fucking Paypal account? It's not a goddamn bank and you don't have the same protections with Paypal, and PP has been known for pulling shit like this for years. Holy shit what an idiot, they were just asking for trouble.
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Old 01-16-22, 11:25 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

This lawsuit was started by Chris Moneymaker, the WSOP champion. Seems like they finally ran up against someone with money who wanted to fight.
Old 01-16-22, 01:37 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by cultshock View Post


And who in their right mind would keep $172,000 in their fucking Paypal account? It's not a goddamn bank and you don't have the same protections with Paypal, and PP has been known for pulling shit like this for years. Holy shit what an idiot, they were just asking for trouble.
this
Old 01-16-22, 03:37 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I didn't know that "PayPal has been known for pulling shit like this for years." But I don't do enough online sales for my PayPal account to get over $100.
Old 01-16-22, 04:12 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

There are some rare lawsuits which are actually good. This is one of them.

Hopefully Paypal and Ebay get severely reprimanded. However, their (limitless) pockets and supply of lawyers will probably win all three lawsuits somehow. But, at least these three brave people are trying. Suing Paypal is like suing the IRS or suing Amazon, plantiffs are almost guaranteed to lose. But, at least they're trying, calling this terrible company out on its draconian, unfair actions.

And, the only reason someone would keep $172,000 in a Paypal account is for some kind of money laundering activity. Or possibily a foreign person, non-US citizen who didn't want to bother with US banks, and their tax reporting / paper trail. But, Paypal's paper trail / phoning home to IRS is probably even WORSE than banks, so that person was truly stupid after all.
Old 01-18-22, 05:01 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by zyzzle View Post
And, the only reason someone would keep $172,000 in a Paypal account is for some kind of money laundering activity. Or possibily a foreign person, non-US citizen who didn't want to bother with US banks, and their tax reporting / paper trail. But, Paypal's paper trail / phoning home to IRS is probably even WORSE than banks, so that person was truly stupid after all.
Either stupid, or doing some shady stuff, either way I have zero sympathy for them. Saying that, I hope that some day Paypal gets absolutely pantsed in court for doing shit like this.
Old 01-18-22, 05:07 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I can't wait for them to lose the class-action lawsuit and be forced to give everyone affected 2% off their regular transaction fees for their next 3 transactions.
Old 01-18-22, 05:52 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I've had paypal illegally hold my funds for years... and been paid settlements in two past events... but both times what Paypal had to pay me for doing so was such a small part of the pool that I literally only got a dollar and some change.
Old 01-18-22, 11:00 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I didn't know any of this. I've been hesitant to jump on the Venmo/Zelle/Cashapp bandwagon more because of sheer laziness. But I guess this is pretty good incentive too. What alternatives does everyone else use?
Old 01-19-22, 09:18 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I still use Paypal, I just keep almost no balance in my account.
Old 01-19-22, 09:25 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I've gotten emails, supposedly from Paypal, claiming my account's been locked, but if you hover your mouse over the sender address, it's about a half mile long collection of letters/numbers from some spammer/scammer domain that is so obviously a scam it's not even funny. I just delete the ones I get, maybe some of these people who are getting these notifications should do the same?
Old 01-19-22, 11:28 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by tanman View Post
I didn't know any of this. I've been hesitant to jump on the Venmo/Zelle/Cashapp bandwagon more because of sheer laziness. But I guess this is pretty good incentive too. What alternatives does everyone else use?
FYI Venmo is from Paypal.

Paypal has been doing this bullshit of holding funds for years. They find a stupid excuse to do so (ebay vendor that don't sell much, irregular transactions, this looks like fantasy sports/ March Madness pool, etc). Customer service is almost non-existent. I'm glad eBay got rid of exclusively using Paypal for transactions. Them two are the most nickel and dime company online right now.
Old 01-19-22, 12:43 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

While I know Venmo is Paypal, I only use it for quick payments back and forth. I also stopped selling on eBay so I don't have issues with people contesting funds.

I tried to use Zelle once to have my daughter send me money. We use the same bank and we did it through their app. It took over a week for the transfer to go through. So back to Venmo.

Last edited by Draven; 01-20-22 at 07:31 AM.
Old 01-19-22, 01:46 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I have used Zelle, Venmo, and Cash app. It seems most people use Venmo, so that is what I use the most, even though I'm not a Paypal fan. I never let my balance get too big due to issues like this. I have noticed zero difference between any of them functionally. In contrast to what the poster above said, I have found Zelle to be the quickest to get into my bank account, which makes sense since it's a direct bank to bank transaction.
Old 01-19-22, 03:07 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by Draven View Post

I tried to use Zelle once to have my daughter send me money. We use the same bank and we did it through their app. It took over a week for the transfer to go through. So back to Venmo.
Don't US banks have electronic transfers for things like that? In Canada, we have something called "e-transfers" which allow people to send money to each other almost instantly through any of the major Canadian banks, and it's free. I don't use it very often, but it does come in handy sometimes.
Old 01-19-22, 03:22 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by tanman View Post
I didn't know any of this. I've been hesitant to jump on the Venmo/Zelle/Cashapp bandwagon more because of sheer laziness. But I guess this is pretty good incentive too. What alternatives does everyone else use?
PayPal is fine, just don't leave funds in your account. I prefer Venmo though.

Zelle is done by actual banks and credit unions if you feel safer doing that. But for whatever reason, it just never took off as well as the others.
Old 01-19-22, 03:40 PM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by cultshock View Post
Don't US banks have electronic transfers for things like that? In Canada, we have something called "e-transfers" which allow people to send money to each other almost instantly through any of the major Canadian banks, and it's free. I don't use it very often, but it does come in handy sometimes.
Thatís basically what Zelle is. Itís run by the banks. Iím not sure if every bank participates though.
Old 01-20-22, 04:43 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Didn't know that Venmo was paypal. That makes even less sense. Why would they need a separate product? I just didn't like it because of the social media aspect of it. WTF does anybody need to know if I chipped in for pizza? But it's seems like that's what everyone uses now.
Old 01-20-22, 07:27 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by tanman View Post
Didn't know that Venmo was paypal. That makes even less sense. Why would they need a separate product? I just didn't like it because of the social media aspect of it. WTF does anybody need to know if I chipped in for pizza? But it's seems like that's what everyone uses now.
Branding, ease of use, and the social aspect, which we "olds" don't really get.
Old 01-20-22, 08:17 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I've had holds put on funds due to dumbass ebay buyers, but it was already returned once the complaint was resolved. I had no idea they were essentially just taking money from accounts and never releasing it. Does this money just sit in an escrow account, or do they get to add this to their operating accounts? I never keep much of a balance in my account because I know they don't have the same stringent regulations banks have, but it seems kind of crazy that they can just keep funds indefinitely like this.
Old 01-20-22, 08:30 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

I had some difficulty with PayPal about 15 years ago, to do with whether the account was personal or business. Otherwise, it has been smooth. I, also, don't leave much in there.
Old 01-20-22, 10:14 AM
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Re: PayPal faces lawsuit for freezing customer accounts and funds

Originally Posted by tanman View Post
Didn't know that Venmo was paypal. That makes even less sense. Why would they need a separate product? I just didn't like it because of the social media aspect of it. WTF does anybody need to know if I chipped in for pizza? But it's seems like that's what everyone uses now.
Originally Posted by fujishig View Post
Branding, ease of use, and the social aspect, which we "olds" don't really get.
Yup, it worked on me. I hated using my Paypal account. I found it really annoying. I use Venmo all the time, and it's simple.

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