PayPal Class Action Lawsuit Due To Account Holds Reached Settlement
Note: This is an old settlement dating back to 2015.
PayPal is an online payment processing service that people often used to pay for online purchases or services that accepts PayPal payments. It has faced a few issues as it tries to maintain security and safety for its users.
A class action lawsuit against PayPal alleges PayPal’s inability to provide an explanation or reason for PayPal accounts gets frozen or balances put on hold.
There is a section in the PayPal User Agreement where it says that PayPal “may hold funds in a seller’s account by placing reserves on accounts and/or limiting and/or suspending seller’s accounts and holding the funds in the accounts for up to and sometimes exceeding 180 days.”
The plaintiffs claim PayPal has not informed them in any way what made them freeze the accounts for 180 days and have not even given them time to get the situation fixed properly.
PayPal denies they did anything wrong but agreed to a settlement arrangement to avoid incurring more costs.
The settlement was initially approved on the 5th of November 2015 and amounted to $3.2 million.
Class action members include current and old PayPal users in the United States who had an active PayPal account between the 19th of April 2006 and 5th of November 2015, with account holds placed on their account and resulted in an account close or suspension by PayPal.
Do you have any plans on suing PayPal because your account is on hold and your funds frozen?
There might be that much detail you can use online on how to sue PayPal as the account contract itself might prevent you from doing so except in a small claims court.
Here’s How To Sue Paypal in a Small Claims Court
Check that your PayPal claim qualifies to be filed in a small claims court.
Amount of money
There is a limit for every state on how much money a plaintiff can seek in monetary damages in a small claims court hearing. The highest amount in some states reaches $10,000, while most would have the lowest limit at $2,500, or you can refer to this link.
Type of relief
Plaintiffs can seek monetary and non-monetary awards in a small claims court.
Most favorable decisions allow for monetary awards, but it’s often the judge’s decision based on how the company does its business.
The judge can also submit a formal decision that prevents PayPal from participating in the same type of business practices that made you sue in a small claims court.
If the cost that you seek exceeds the state-mandated maximum amount allowed, then the case must be sent to binding arbitration.
A company representative can help you with the binding arbitration process.
Send a demand letter
PayPal has a dispute resolution page on the website. If PayPal does not agree with your sentiments, then the small claims court will be your next best bet.
Writing a demand letter is easy. Just be clear and concise with your letter and make sure you include your contact details.
Fill out court forms
Each state has its own set of forms that need to be filled out and submitted before any action can be taken against PayPal.
Here’s a link that you can refer to so you can see which forms you should fill out.
You can either go to a small claims court to file your paperwork, or you can send it through the mail.
Always check your forms so you can get processed quickly. A court clerk will give you a stamped copy of the forms and a court date. Keep it safe and bring it with you on the date of your hearing.
File your claim against PayPal
Expect that your lawsuit will take long before it gets resolved. But filing it in a small claims court is a good first step.
You’d just need to serve PayPal once you get your case filed in a small claims court by sending the legal documents explaining everything about your lawsuit.
Please refer to your state’s judicial website so you’ll know how to serve formal court papers. Just follow the guidelines to the letter.
Show up to your court date
Note it on your calendar, mobile phone, or anywhere that will remind you when your court date is. Make sure to put your best foot forward and bring anything that can help you win your case.
Talk with your legal representative
Always be in communication with your legal representative. Provide them the details they need and make sure you have their phone number or email address.
Editor’s Note on PayPal Class Action Lawsuit Settlement:
This article on PayPal Class Action Settlement was requested by a subscriber.
It’s an old settlement, but if you have similar issues and believe there could be a possible legal action taken against the company, then please tell us about it. We would be glad to help!