PayPal faces lawsuit for freezing customer accounts and funds
coolstanley
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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."
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Comments
Bottom line, never leave more than you can afford to lose in your Paypal account. They do pull this nonsense on a regular basis.
Has happened to me and one of the most frustrating experiences I had ever dealt with.... they told me to kick bricks and speak with the US Treasury Dept.
So happy they are finally being sued for this.
US Treasury unlike PayPal follows the letter of the law. If they are behind seizures notification via US mail would have occurred at minimum.
Why is PayPal not subject to same regulations as a Bank operating in the US? I do hope this gets before a federal judge! Even better before Federal Prosecutors seeking to make a bone
It's the singer not the song - Peter Townshend (1972)
So true. I can’t get my money out of there fast enough. Can’t think of a single reason to keep a balance with PayPal.
What is odd about my issue.... it was a sports poster sale between two Canadians and no Americans were involved. PayPal said their algorithm detected potential terrorist funding and seized my funds and told me to talk to the US Treasury dept. I contacted them and they were clueless about PayPal and eventually PayPal just released the funds after several weeks.
It was like PayPal needed a loan until their payday