PayPal Facing Possible Class Action Lawsuit re Seizing Customer Funds

[cubby]

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.

Will be interesting to see what happens when this is filed. Class Actions can be fantastic for those people who have been wronged but don't have the means to fight back.

[PACOX]

Not making a judgment but I can see how each one of those cases could trigger fraud detection.

[DarkAmbient]

Paypal are notorious for this shit. It's the reason I never leave any money in my Paypal account. And be careful if you use a VPN for your browsing, because accessing Paypal via VPN is against their ToS and they might freeze your account for that too.

[Afrospinach]

Paypal are notorious for this shit. It's the reason I never leave any money in my Paypal account. And be careful if you use a VPN for your browsing, because accessing Paypal via VPN is against their ToS and they might freeze your account for that too.

Odd, I am sure if you are really clever you can get around it but no bank I have dealt with will even allow you to access their website with a VPN.

[Twdft]

And be careful if you use a VPN for your browsing, because accessing Paypal via VPN is against their ToS and they might freeze your account for that too.

How is that even legal. With the amount of free wifi around who in their right mind would not use a vpn when not at home?

[Zan15]

Not making a judgment but I can see how each one of those cases could trigger fraud detection.

Yah i though using paypal for gambling was against their TOS?
Especially since her running some kind of gambling club was probably illegal in her state.

Something tells me this will go nowhere.

even if it did these folks will get pennies and the lawyers will get millions.

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Paypal are notorious for this shit. It's the reason I never leave any money in my Paypal account. And be careful if you use a VPN for your browsing, because accessing Paypal via VPN is against their ToS and they might freeze your account for that too.

I guess it's like letting some strange dude from Poland go to your bank and take out 1000 bucks for you without any real authorization or communication with the bank.

A lot of sites now will require additional authentication when a new IP comes rolling into their servers for your account. Guess they don't want to deal with that kind of volume by allowing VPNs?

[PACOX]

How is that even legal. With the amount of free wifi around who in their right mind would not use a vpn when not at home?

A lot companies disallow VPNs in their TOS. Not to say they'll ban you for using one but to say they aren't responsible if your service ends up getting hindered/terminated if you end up getting IP banned, tripped by fraud detection, they aren't going to help you get out of local laws because you're using a VPN, they aren't going to design their systems to tolerate VPNs.

Basically, use a VPN at your own risk.

[Trifle]

Yah i though using paypal for gambling was against their TOS?
Especially since her running some kind of gambling club was probably illegal in her state.

Something tells me this will go nowhere.

If it was against their TOS they'd be within their rights to shut down the accounts... but there's no excuse for not giving the money back, to keep it is literally theft.

[Zan15]

If it was against their TOS they'd be within their rights to shut down the accounts... but there's no excuse for not giving the money back, to keep it is literally theft.

but if it's against the TOS and Illegal, they are required to retain the funds and contact the appropriate authorities.

Thus, if she was running an illegal gambling operation without a license and against state law....

[Endus]

but if it's against the TOS and Illegal, they are required to retain the funds and contact the appropriate authorities.

Thus, if she was running an illegal gambling operation without a license and against state law....

Yeah, there's a big difference between "we closed your account and kept your money, neener neener" and "we've closed your access to the account and have contacted the authorities; as the money is the product of illegal activity we'll be turning it over to them as evidence".

Even regular banks can and will do the latter.

[cubby]

but if it's against the TOS and Illegal, they are required to retain the funds and contact the appropriate authorities.

Thus, if she was running an illegal gambling operation without a license and against state law....

PayPal isn't the decider on what is and is not illegal activity. So they do not get to decide who keeps what and when. At best they can hold the funds and contact authorities.

And the three stories in the article are just a minuscule fraction of what PayPal has done to people. I really hope this class action goes through. If it's Certified, PayPal will be forking over millions of dollar, plus fines/fees, plus attorney fees.

[Zan15]

PayPal isn't the decider on what is and is not illegal activity. So they do not get to decide who keeps what and when. At best they can hold the funds and contact authorities.

And the three stories in the article are just a minuscule fraction of what PayPal has done to people. I really hope this class action goes through. If it's Certified, PayPal will be forking over millions of dollar, plus fines/fees, plus attorney fees.

They won't pay any fines under class actions since they are not criminal charges/prosecution.

What will be a minuscule fraction will be what users get in the class action settlement.

Class action is the worst thing they could do. They should go after paypal as an individual, get the rulings and let those ruling stand as "case law" in providing settlements for everyone else. Class actions will just let paypal off the hook and give most of the money to lawyers.

[XDurionX]

If it was against their TOS they'd be within their rights to shut down the accounts... but there's no excuse for not giving the money back, to keep it is literally theft.

It's not that easy, at least in the EU. Paypal has to follow the guidelines for banks over here, they can't just shutdown accounts for hurt feelings. This is really gonna cost them dearly.

[PACOX]

It's not that easy, at least in the EU. Paypal has to follow the guidelines for banks over here, they can't just shutdown accounts for hurt feelings. This is really gonna cost them dearly.

Don't does guidelines include the freezing of any potentially fraudulent activity?

[cubby]

What will be a minuscule fraction will be what users get in the class action settlement.

Class action is the worst thing they could do. They should go after paypal as an individual, get the rulings and let those ruling stand as "case law" in providing settlements for everyone else. Class actions will just let paypal off the hook and give most of the money to lawyers.

No, they won't. Class Actions are the BEST way to go, because of the number of individuals affected. What you're describing as "case law" "ruling[s]" are precisely what Class Actions accomplish. Case law really only comes from written rulings, typically from appellate courts (State or Federal). Case outcomes, i.e. defendant or plaintiff winning, don't affect other cases that are tried individually. So if each PayPal plaintiff tried their case separately, the outcome of each suit wouldn't affect the remaining suits. Whereas in a Class Action, the entire pool of plaintiffs are affected by the outcomes of 5-10 cases.

A class action lawsuit combines many claims into one, making the entire process much smoother and quicker for all parties involved. ... During a class action lawsuit, the group of harmed people will assign their lead plaintiff to file the lawsuit on behalf of all party members.

Class Action law suits essentially take a huge number of individual plaintiffs, people who otherwise might not be able to file suit, and bring them altogether. Once "Certified" as a Class Action, attorneys can gather up more plaintiffs - in this case I would expect hundreds of thousands, if not millions. The plaintiff's attorneys then try their best few cases, and those results are applied to the Class Action negotiations.

It's MUCH MORE complicated than my short paragraph, but the link from Nolo is a good one.

They won't pay any fines under class actions since they are not criminal charges/prosecution.

No, but they will liable for any civil fines that arise from the litigation - including treble damages, etc.

[Zan15]

No, they won't. Class Actions are the BEST way to go, because of the number of individuals affected. What you're describing as "case law" "ruling[s]" are precisely what Class Actions accomplish. Case law really only comes from written rulings, typically from appellate courts (State or Federal). Case outcomes, i.e. defendant or plaintiff winning, don't affect other cases that are tried individually. So if each PayPal plaintiff tried their case separately, the outcome of each suit wouldn't affect the remaining suits. Whereas in a Class Action, the entire pool of plaintiffs are affected by the outcomes of 5-10 cases.

A class action lawsuit combines many claims into one, making the entire process much smoother and quicker for all parties involved. ... During a class action lawsuit, the group of harmed people will assign their lead plaintiff to file the lawsuit on behalf of all party members.

Class Action law suits essentially take a huge number of individual plaintiffs, people who otherwise might not be able to file suit, and bring them altogether. Once "Certified" as a Class Action, attorneys can gather up more plaintiffs - in this case I would expect hundreds of thousands, if not millions. The plaintiff's attorneys then try their best few cases, and those results are applied to the Class Action negotiations.

It's MUCH MORE complicated than my short paragraph, but the link from Nolo is a good one.

No, but they will liable for any civil fines that arise from the litigation - including treble damages, etc.

Most class actions end in settlements without there being any admission of wrong doing and the only ones who get anywhere near their actual damages are the original few that end up with higher settlements then the people who opt into the class action.

Currently part of a 20 year pension class action lawsuit where a settlement was finally reached and the corporation just ignored it and paid out what i though it should. Now its back in the courts for another few years. Was part of the Ford transmission lawsuit, two years now still waiting for my payout of hundereds for thousands of dollars in repairs. People who sued individually got settlements that ended up being way larger.

Those and about a dozen other. Not to mention i have enough free "credit monitoring" from all the breaches on my personal information by businesses. Oh and the rando "coupons" to buy replacement products. Every one though somehow finds millions and even tens of millions for the lawyers though.

Class actions might have their place but i don't see this being one of them unless these people want to wait a long time and get a portion of it back.

[cubby]

Most class actions end in settlements without there being any admission of wrong doing and the only ones who get anywhere near their actual damages are the original few that end up with higher settlements then the people who opt into the class action.

Currently part of a 20 year pension class action lawsuit where a settlement was finally reached and the corporation just ignored it and paid out what i though it should. Now its back in the courts for another few years. Was part of the Ford transmission lawsuit, two years now still waiting for my payout of hundereds for thousands of dollars in repairs. People who sued individually got settlements that ended up being way larger.

Those and about a dozen other. Not to mention i have enough free "credit monitoring" from all the breaches on my personal information by businesses. Oh and the rando "coupons" to buy replacement products. Every one though somehow finds millions and even tens of millions for the lawyers though.

Class actions might have their place but i don't see this being one of them unless these people want to wait a long time and get a portion of it back.

So your experience knowledge comes from purely empirical data, where you aren't fairing as well as you should. And the suit you're involved in is 20+ years old. I mean, you kinda of dealt yourself out of this conversation on that point alone. For example, people who sued also took a MUCH larger risk, and people who sued also lost as well.

Do you know how much class action attorneys get paid if they lose? Nada. Risk/reward. And they help the little guy, who otherwise wouldn't have been able to even try.

Class action lawsuits are designed, overall, to help the little person go up against the big corporation. I'm sorry if yours isn't working out, but one example is almost literally irrelevant in a conversation about the merits and results of class actions overall.

In most cases, a class action lawsuit helps a person, an individual, go up against an otherwise overwhelming adversarial defendant, who otherwise would litigate the plaintiff into submission. Modern class actions are also set up so the results MUST be adhered to, without wiggle room to go another direction if the result isn't satisfactory. In this case, this situation with PayPal is a perfect example. Someone who lost a couple thousand dollars to PayPal wouldn't' have the wherewithal to sue on their own, but a class action suit will bring them justice (assuming the plaintiffs are successful).

[Zan15]

So your experience knowledge comes from purely empirical data, where you aren't fairing as well as you should. And the suit you're involved in is 20+ years old. I mean, you kinda of dealt yourself out of this conversation on that point alone. For example, people who sued also took a MUCH larger risk, and people who sued also lost as well.

Do you know how much class action attorneys get paid if they lose? Nada. Risk/reward. And they help the little guy, who otherwise wouldn't have been able to even try.

Class action lawsuits are designed, overall, to help the little person go up against the big corporation. I'm sorry if yours isn't working out, but one example is almost literally irrelevant in a conversation about the merits and results of class actions overall.

In most cases, a class action lawsuit helps a person, an individual, go up against an otherwise overwhelming adversarial defendant, who otherwise would litigate the plaintiff into submission. Modern class actions are also set up so the results MUST be adhered to, without wiggle room to go another direction if the result isn't satisfactory. In this case, this situation with PayPal is a perfect example. Someone who lost a couple thousand dollars to PayPal wouldn't' have the wherewithal to sue on their own, but a class action suit will bring them justice (assuming the plaintiffs are successful).

Sorry I even brought up that I was involved in those class actions, I guess we can ignore the millions of others that were also included. I mean the ford one includes 2 million owners, but hey it's not like there are hundreds of examples out there currently. It locked me into a position that my opinion was based on two examples and just personal experience/results.

It's been a hobby of mine to follow class actions and be part of the suit when I qualify. You'd be surprised how many a year the general population could qualify for but never even know since a lot of class actions do not require any real notification requirements to the effected "class". On average I get about 6-8 settlement checks a year, none adding up to anything substantial.

Hell, even the Ford one it's been 2 years since the payout agreement and 4 years since my clutch died and I am still waiting for my lousy 250 Ish dollars. Those 250 dollars which is a fraction of the cost of replacement and cost of dealing with the lack of a car. Luckly, I decided to go after ford myself, and managed to get them to pay for a replacement (without a lawyer). Ford actually decided to extend its warranty and back pay all those repairs outside of the class action to the point that the class action is now just paying people for "pain and suffering" vs actually paying for the repair in most cases. People also fared better by opting out of the class action and going directly after ford for total replacements on their vehicles. Doesn't even require a lawyer since its under third party arbitration.

In most cases, a class action lawsuit helps a person, an individual, go up against an otherwise overwhelming adversarial defendant, who otherwise would litigate the plaintiff into submission. Modern class actions are also set up so the results MUST be adhered to, without wiggle room to go another direction if the result isn't satisfactory. In this case, this situation with PayPal is a perfect example. Someone who lost a couple thousand dollars to PayPal wouldn't' have the wherewithal to sue on their own, but a class action suit will bring them justice (assuming the plaintiffs are successful).

Bullshit. As part of a class action if this person did not opt out and decided to file as part of the class action they are bound to the settlement and rulings. In most cases the general class gets pennies on the dollar. Someone who lost a couple thousand dollars could end up with a couple hundred dollars in a settlement. This is the case in the majority of class actions. The few lead plaintiffs would more than likely get the full amount and might get a tad more, but the other 99.9% wouldn't.

Modern class actions are just negotiated settlements at this point.

Also, the results are often not adhered to, and companies wiggle through massive loopholes in the settlement agreements. Many class actions i have followed have ended back up in court for failure to adhere to the agreement and terms of the payout.
If you want a wonderful example, check out the 20-year history of the Cigna pension suit. https://www.mycignapension.com/ the original suit was filed Dec 11 2001 and eventually it morphed into a class action lawsuit.

I was not just talking about the ones I have been involved in. Class action lawsuits have been historically only good for the lawyers and decent for the few that get pegged as the "Named Plaintiffs" that "represent" the full group in the class action.

Class actions have their place, it's just unfortunate at this point in most cases it's just a way for lawyers to win the lottery and for the business to save money in a long-drawn-out litigation and dealing with the cost of defending each case individually.

[cubby]

Sorry I even brought up that I was involved in those class actions, I guess we can ignore the millions of others that were also included. I mean the ford one includes 2 million owners, but hey it's not like there are hundreds of examples out there currently. It locked me into a position that my opinion was based on two examples and just personal experience/results.

It's been a hobby of mine to follow class actions and be part of the suit when I qualify. You'd be surprised how many a year the general population could qualify for but never even know since a lot of class actions do not require any real notification requirements to the effected "class". On average I get about 6-8 settlement checks a year, none adding up to anything substantial.

Personal experience is great, but it doesn't bear at all when evaluating the overall effectiveness of something that affects hundreds of millions of people. What it actually does is remove the objectivity of evaluating something because of the inherent bias from that personal experience, whether good or bad.

Hell, even the Ford one it's been 2 years since the payout agreement and 4 years since my clutch died and I am still waiting for my lousy 250 Ish dollars. Those 250 dollars which is a fraction of the cost of replacement and cost of dealing with the lack of a car. Luckly, I decided to go after ford myself, and managed to get them to pay for a replacement (without a lawyer). Ford actually decided to extend its warranty and back pay all those repairs outside of the class action to the point that the class action is now just paying people for "pain and suffering" vs actually paying for the repair in most cases. People also fared better by opting out of the class action and going directly after ford for total replacements on their vehicles. Doesn't even require a lawyer since its under third party arbitration.

Those third party arbitration options typically come from the initial class action lawsuit. While outside that process, the company can sometimes off those non-class action options as a way to dilute the class or other reasons. Both good and bad, but wouldn't have happened without the initial suit.

Bullshit. As part of a class action if this person did not opt out and decided to file as part of the class action they are bound to the settlement and rulings. In most cases the general class gets pennies on the dollar. Someone who lost a couple thousand dollars could end up with a couple hundred dollars in a settlement. This is the case in the majority of class actions. The few lead plaintiffs would more than likely get the full amount and might get a tad more, but the other 99.9% wouldn't.

Again, this seems to be coming from your personal experience rather than the reality of the class action vehicle. People who would have no chance in court because they can't afford to sue, or their claim wouldn't be taken up by an attorney because the suit costs far outweigh the outcome have a chance for justice. That isn't "bullshit", that is objective fact.

I can't really go on with this conversation if you don't understand this basic tenet of class actions. Your personal experience doesn't define the legitimacy of the class action suit, nor the outcomes.

Modern class actions are just negotiated settlements at this point.

Precisely. Settlements that wouldn't have even began without the class action vehicle. Imagine suing PayPal for the $1,247.93 they seized from your account illegally. Filing the suit would cost more.

Also, the results are often not adhered to, and companies wiggle through massive loopholes in the settlement agreements. Many class actions i have followed have ended back up in court for failure to adhere to the agreement and terms of the payout.
If you want a wonderful example, check out the 20-year history of the Cigna pension suit. https://www.mycignapension.com/ the original suit was filed Dec 11 2001 and eventually it morphed into a class action lawsuit.

Of course there will be class actions that go badly, that's how law suits work. There are others that go very well. And then millions that are in between.

I was not just talking about the ones I have been involved in. Class action lawsuits have been historically only good for the lawyers and decent for the few that get pegged as the "Named Plaintiffs" that "represent" the full group in the class action.

Class actions have their place, it's just unfortunate at this point in most cases it's just a way for lawyers to win the lottery and for the business to save money in a long-drawn-out litigation and dealing with the cost of defending each case individually.

Where are you getting this information? How are you pegging something as "only good" or "decent"? You're making enormous generalities about something you've already admitted to being biased against because of your personal experience. I'm not calling you out on that or saying it's bad, I would feel the same way. A 20 year old suit that still isn't finished, and now the company is heading back to court with it? That would fucking piss me off.

But that experience isn't what everyone has - and in many cases plaintiffs who wouldn't have gotten anything receive a settlement amount and some compensation for their loss (or pain or whatever). Is the system perfect? Of course not. Does it favor the attorneys? Of course it does, the class action statute was written by plaintiff's attorneys. But it does work overall, and helps those that otherwise wouldn't have been able to do anything.

[Self Inflicted Wounds]

but if it's against the TOS and Illegal, they are required to retain the funds and contact the appropriate authorities.

Thus, if she was running an illegal gambling operation without a license and against state law....

They have done the same for people playing fantasy football. Sorry, but Paypal is way out of line.