Lena Evans began using PayPal in August 1999. The complaint for this class action alleges, “Without any advance warning, on or about November 22, 2020, Ms. Evans learned that her PayPal account was frozen.” Later, she learned that PayPal had seized nearly $27,000 from the account without providing her with any reason why. The other two plaintiffs in this class action have had similar experiences. The complaint alleges that PayPal, Inc. has a practice of seizing funds from customer accounts without notice or explanation, alleging that the customer has violated the company’s Acceptable Use Policy (AUP).
The class for this action is all natural persons or legal entities who, within the applicable statutes of limitations, were users of PayPal who had funds taken from their accounts by PayPal, based on a purported breach of the company’s Acceptable Use Policy.
The complaint alleges that PayPal has a “widespread business practice of unilaterally seizing funds from its clients’ financial accounts, without cause and without any fair or due process.” In fact, the complaint alleges that the company has gone so far as to tell customers “that they will ‘have to get a subpoena’ to learn the simple information as to why PayPal was holding, and denying [to them], access to their own money.”
“Upon information and belief,” the complaint alleges, PayPal “seizes these funds without first obtaining any conclusive information of actual breaches by the users of the AUP—indeed, [PayPal] does so without even conducting a reasonable investigation…”
PayPal’s User Agreement is a contract of adhesion, with no opportunity given for users to negotiate terms. The complaint argues, “To interpret the ambiguous language … in PayPal’s favor is against all equity and contrary to prevailing rules of contractual construction.”
The complaint quotes the User Agreement as saying, “If [the user] violated our Acceptable User Policy, then you’re also responsible for damages to PayPal caused by your violation of this policy.” It adds, “You acknowledge and agree that $2,500.00 U.S. dollars per violation of the Acceptable Use Policy is presently a reasonable minimum estimate of PayPal’s actual damages…”
The AUP is not part of PayPal’s User Agreement. Also, the complaint claims, “These provisions explicitly only allow for [PayPal to collect damages if there has been a violation of the AUP—not merely a suspected violation, or an alleged violation. Moreover, even where there is an actual violation, users are expressly only liable to [PayPal] for [PayPal’s] ‘damages’ caused by said violation.”
The complaint further alleges that the plaintiffs in this case, whose money has been seized, have had great difficulty even contacting a human being or getting a response from PayPal as to why their funds have been seized or what they must do to get them back.
The causes of action include conversion, violations of the Electronic Funds Transfer Act, and civil violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, among other things.
Article Type: LawsuitTopic: Consumer
Most Recent Case Event
PayPal Seizure of Customer Funds Without Notice Complaint
January 13, 2022
Lena Evans began using PayPal in August 1999. The complaint for this class action alleges, “Without any advance warning, on or about November 22, 2020, Ms. Evans learned that her PayPal account was frozen.” Later, she learned that PayPal had seized nearly $27,000 from the account without providing her with any reason why. The other two plaintiffs in this class action have had similar experiences. The complaint alleges that PayPal, Inc. has a practice of seizing funds from customer accounts without notice or explanation, alleging that the customer has violated the company’s Acceptable Use Policy (AUP).
PayPal Seizure of Customer Funds Without Notice ComplaintCase Event History
PayPal Seizure of Customer Funds Without Notice Complaint
January 13, 2022
Lena Evans began using PayPal in August 1999. The complaint for this class action alleges, “Without any advance warning, on or about November 22, 2020, Ms. Evans learned that her PayPal account was frozen.” Later, she learned that PayPal had seized nearly $27,000 from the account without providing her with any reason why. The other two plaintiffs in this class action have had similar experiences. The complaint alleges that PayPal, Inc. has a practice of seizing funds from customer accounts without notice or explanation, alleging that the customer has violated the company’s Acceptable Use Policy (AUP).
PayPal Seizure of Customer Funds Without Notice Complaint