PayPal faces lawsuit for freezing customer accounts and funds

Captain_Nothing

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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."

Source: https://www.engadget.com/paypal-lawsuit-freezing-customer-accounts-funds-073128563.html
 

Raj Kesu

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It is sad to see such big brands operating in a way that the law itself considers as unfair (sometimes illegal) trade practices. There are numerous news articles in media about Google fined for non-compliance, antitrust, etc.
 

HoNeYBiRD

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PayPal was sued countless times before for this very same reason, you can find articles from 2 decades ago even. These cases end with a settlement at best. They paid multiple million in these settlements already. Nothing changes, PayPal continue with this practice.

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BlueSwan

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How about how they release peoples private info to the other party whenever money is sent? Never trust banks but never never trust silicon valley lol.
 

nakamura

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Finally. This can happen to any of us at any time.

Sillicon Valley companies like Facebook, Google and also PayPal are really taking the piss with punishing businesses/entrepreneurs without real reason. Ad accounts on Facebook get banned, Accounts on Google/YouTube/Google Play are getting terminated, PayPal freezes funds. Wtf is wrong with those companies? I am definitely not a friend of governments regulating companies, but in these cases the govt. should definitely AT LEAST make sure those companies won't do evil or damaging shit.
 

Raj Kesu

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PayPal, Visa, MasterCard, etc nowadays unfortunately and incorrectly think that all non-physical / digital products are illegitimate scams. Hence, almost all disputes raised by buyers of non-physical / digital products, go only in favor of the buyers. Since a few years, buyers are getting aware of this and hence after receiving a non-physical / digital product they bought, in good working condition, would still fraudulently raise a dispute, knowing that no matter what, PayPal, card company, would decide in the buyer's favor.
I am glad that now atleast, many sellers of non-physical / digital products and services, are now accepting only payment methods which cannot be charged back, such as crypto.
By many sellers, I am not referring to BHW, I am referring to the whole world.
It is perfectly fine if anyone or any seller does not agree with the above. No issues, just keep on accepting PayPal and keep on doing charity (giving your non-physical / digital products or services, for free), as mostly nowadays you will get fraudulent chargebacks.
So those who love to do charity, that is awesome, please continue doing that charity.
Accept PayPal ONLY for a physical product that is physically shipped to the buyer, for which you get a trackable proof of shipment.
But, still you are at risk of getting screwed ... "I opened the box shipped by the seller and it contained these stones as in my photo proof and not the mobile phone that I ordered" ... And guess what ? PayPal will favor the buyer.
Some people learn the easy way through the mistakes of others, while others prefer to learn the hard way. And some people never learn at all, no matter what. Absolutely no problem. Each one to their own.
 
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