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This settlement is closed!
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A settlement has been proposed in a class action lawsuit alleging PayPal Inc. improperly handled disputed transactions and improperly placed holds on PayPal Accounts. If you had an active PayPal account between April 19, 2006 and Nov. 5, 2015, your rights may be affected by this class action settlement.
The proposed $3.2 million PayPal class action settlement will resolve allegations that PayPal improperly handled disputed transactions and placed holds, reserves or limitations on customers’ accounts without notice, and in some cases suspended or closed accounts. The plaintiffs claim that PayPal failed to provide customers with monthly account statements and error-resolution notices as required by the Electronic Fund Transfer Act.
PayPal operates an online payment processing service that facilitates payments between buyers and sellers of goods and services sold online. According to the PayPal class action lawsuit, the PayPal User Agreement indicated that upon a breach of its terms, 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 in some cases exceeding 180 days.”
The plaintiffs, who had used PayPal as sellers, claim that they all had funds in their PayPal accounts frozen for 180 days, but PayPal failed to inform them about the type of activity that triggered the account freeze. Further, PayPal allegedly failed to provide them with an opportunity to remedy the situation and avoid holds being placed on their accounts in the future.
PayPal denies any wrongdoing but agreed to settle the account hold class action lawsuit to avoid the expense and uncertainty of trial. The PayPal class action settlement was preliminarily approved on Nov. 5, 2015.
Who’s Eligible
You are eligible to file a claim for the PayPal class action settlement if you are a current or former user of PayPal in the United States who:
- Had an active PayPal account between April 19, 2006 and Nov. 5, 2015; and
- Had a hold or reserve placed on the account and/or the account was closed or suspended by PayPal.
If this definition describes you, you are a Claims Class Member.
Potential Award
Up to $2,000.
Claims Class Members may elect to make a Basic Claim or an Alternate Claim.
- Basic Claim: If you are a Claims Class Member and you elect to make a Basic Claim, your payment will be determined based on the dollar amount of the longest hold or reserve on your account. These Basic Claim amounts are expected to range from $3 to $440.
- Alternate Claim: If you are a Claims Class Member, you may elect to make an Alternate Claim to seek payment for your actual damages, up to a maximum possible payment of $2,000. If your Alternate Claim is denied, your claim will be treated as a Basic Claim.
Injunctive Relief:
PayPal has agreed to revise its User Agreement and add certain disclosures about its use of fraud and risk modeling. It has also agreed to change its policy with regard to requests for information, and to disclose the reason for a hold, reserve or limitation as long as this disclosure is not inconsistent with PayPal’s security requirements. All Class Members are entitled to this relief.
Proof of Purchase
Claims Class Members must follow the directions on the Claim Form and fill it out completely.
Claim Form
Claim Form Deadline
UPDATE: On August 1, 2016, a second claim form deadline of October 14, 2016 was added for class members who did not receive class notice on or before April 10, 2016.
UPDATE 2: On Nov. 14, 2016, PayPal users urged a California federal judge to grant final approval of a near $4 million settlement over claims the company placed inappropriate holds or reserves on sellers’ funds.
05/10/2016: If class notice was received on or before April 10, 2016
10/14/2016: If class notice was not received on or before April 10, 2016, but was received after this date.
Case Name
Zepeda v. PayPal Inc., Case No. 5:10-cv-02500 SBA, in the U.S. District Court for the Northern District of California
Final Hearing
01/11/2017
UPDATE 3: On November 23, 2016, the court continued the final hearing until January 11, 2017.
UPDATE 4, January 15, 2017: The court has continued the final hearing until February 8, 2017.
UPDATE 5: On March 24, 2017, the court granted the PayPal Account Hold settlement final approval. Let Top Class Actions know when you receive a check in the comments section below or on our Facebook page.
UPDATE 6: On April 17, 2017, an appeal to the PayPal Account Hold settlement was filed. Claims will not be paid until all appeals are exhausted. We appreciate your ongoing patience. Top Class Actions will continue to provide updates as we learn more.
UPDATE 7 on August 22, 2017: The appeals to the PayPal Account Hold settlement have been resolved. According to the settlement website, claims will be paid by October 24, 2017. Let Top Class Actions know when you receive a check in the comments section below or on our Facebook page.
UPDATE 8: On Oct. 26, 2017, Top Class Actions viewers who filed a claim for the PayPal Account Hold class action settlement started receiving checks worth as much as $23.15. Congratulations to everyone who got PAID!
Settlement Website
Claims Administrator
Zepeda v. PayPal Settlement Administrator
P.O. Box 4259
Portland, OR 97208-4259
Class Counsel
QUANTUM LEGAL LLC
LEXINGTON LAW GROUP
FARMER JAFFE WEISSING EDWARDS FISTOS & LEHRMAN PL
SEEGER WEISS LLP
Defense Counsel
STROOCK & STROOCK & LAVAN LLP
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239 thoughts onPayPal Account Hold Class Action Settlement
It is not working for me either
I have been suspended closed reopened when they wanted and suspended again when ever got money from being a seller..the reasons for it didn’t make any since.they fusterated me so bad to were I was so stressed out and crying.them and eBay are both crock of shits..and collect,keep,and steal money from all their custmors and put them in debt with debt collectors for stupid unreasonable reasons.like eBay I tried selling something and it didn’t sell by the time I knew it they limited my account and I have a hundred dollar letter in the mail from a debt collector.bullshit eBay never told me about that and I didn’t make any money now I have to pay them and wasn’t even told before using eBay.them both should be sued!!!
The reason why you got limited was that $500 transaction. Your new to PayPal, they see 99 cents, $1.00 and immediately its flagged. The fact you did 99 cents and $1 seems like you tried to do something with your own credit card. Who sells something for .99 cents $1 and then $500. you tried to max out the withdrawal on a new account. So right there that is fishy!
First off all, you NEVER ship anything out until the funds are physically in your bank account. PayPal will never go into your bank account because they legally have no authorization to do so. They will try to con you into going into your paypal account and making the authorization yourself. What ever load of BS they tell you, you are under no legal obligation. Second, in regards to your customers, PayPal legally charged the credit cards of your buyers not you. You never had the buyer’s physical credit card numbers in your possession, so your not legally liable for anything. Third, regards to collections, if PayPal sends you a debt collector, you write a certified letter and state, (1) do not call and place everything in writing and (2) state you want proof of the debt owed. With proof of debt owed, the collection agency and PayPal (if paypal didnt sell the debt to the collection agency) has to prove (a) that PayPal deposited the funds into your bank account as they were legally obligated to do, since they charged you a fee for their service and (b) that the product was shipped to the confirmed address of where the payment was sent to. For step B, the only way PayPal is going to prove that is either they got the tracking information from you or the buyer. Once your account is limited, PayPal will lie, cheat and steal, from you to hand over information like drivers license, billing statement social, etc. That is all BS. The only reason why they want that information is so that they can get a collection agency after you and validate that thats were you live. So never give them your physical address of where you live, get a PO Box or a UPS store box. PayPal is trying to bank on your stupidity and fears and nothing more. The second you state the Consumer Protection Act of 1978, both PayPal and the collection agency will back off.
As long as tell PayPal and the debt collection agency to establish proof of the debt owed, which means PayPal has to prove that they transfered funds into your bank account and has to provide proof that the buyer received the goods (dont give them any information because they will use it against you and say anything to get you to give them money) they have no case. If they put something on your credit report, dispute the claim with your credit agency and sue PayPal.
Paypal DID go into my bank account. I’m still hoping for a class action lawsuit on that one. My account was($550) due to a dispute. I owed money on my Paypal Credit account and make my monthly payments on time. I scheduled a payment in the amount of $100 and can you believe Paypal took $650!! I still can’t believe they did it and fought it with PNC bank and PNC bank didn’t feel it was erroneous even though I had an email showing them I only authorized $100.
I once received 400$ in a class action case against 800 contacts, because they were asking callers for this zip code over the phone, I have high hops for this PayPal settlement. http://Www.alexislennon.com web designer
Paypal has all the documentation and you cant get anything from them except contact our legal dept, in which case you run into a stone wall. That 3.2 million wont be near enough, especially when the blood sucking bottom feeder lawyers get done. They will take half that, and with as many people as GAYPAL and EGAY has screwed, 500 million may not be enough. I for one intend to object. Ill settle for the $2000 not to object, but that wont happen. As many people has they have screwed the way it is written all the claimants will be lucky to get the $3, if that. Anyone else agree with me??
Nope, their is a compensation graph and it shows a set amount as to who will be getting what. Im glad they are asking for documentation, it rules out all the fraudsters filing false claims.
Yes!! i will not settle for a mere $3 or even $2k they ruined my life by holding my money and had to close my business. They are careless and ruthless i will fight against what they did until my last breath!
Alex, I couldnt agree with you more. My customer, who NEVER FILED A DISPUTE AGAINST ME, MEANING PAYPAL MADE UP THE WHOLE THING so they could steal our money, and I spent a combined 30 plus hours on the phone with those PayPal thieves. They owe me way more than a measly $3 just for my time alone, much less the stress and aggravation. Ill be notifying the settlement administrator that I strongly object to the settlement terms, and I suggest everybody else do the same.
says the raging dyke with sand in her twat
Haha good one
Quit your whining Jones, with so many people JONESING for a freebie rom JPAL and JBAY ….wahhhhhhh
SUE PAYPAL THEY SUSPENDED AND CLOSED FOR NO REASON !!!!!!!!
Right! What’s a supporting document
How do I find supporting documentation if this happened in the past and I cant find on my PayPal where it occurred.
I am in the same boat. Let me know if you hear anything. Thanks in advance.
We are not in the time frame for this lawsuit, but they are still holding funds without notice for 21 days. It just happened to us! They told us they hold the first transaction, if you’re a new user. Our first transaction was for 99 cents, our second was $1.00, our third was for $500, of course they held the third transaction. The folks had their items already … no recourse for us!
Yes and I am not happy that in order for me to get the money I need to do their job. I have overly met time and other requirements. I DO not ever want to do business with them again.
thanks for the info Andrea , you are very pretty.
I had someone send me money and they held it from april 17th-may 4th 2015. Do they mean a hold on money or the entire account?
Including myself, lots of people had more than 1 paypal account. Why you can only claim one account is going to set you up for many objections which is something I plan on doing myself. If this happened to both accounts than your not being fair to the class members.
The claim form is not working
Sue, it work for me.
You people should NEVER SETTLE as you always do. And they continue their crap over and over again. You people are so quickly to settle, they settle and they jump and down saying oh we didnt do anything wrong. You ever been put on hold at paypal they tell the buyer left and right file a dispute file a dispute and 1 in 25 times they tell the buyer to contact the seller. paypal promotes buyers to file disputes and they hold the seller responsible for what they do. If you dont settle then its a criminal act and paypal will be forced to change. But people are morons into settling, which means you tell paypal it was ok to do, nothing legal gets recorded and paypal can say oh theres no legal action or verdict.
Do anyone have email address for Zepeda Law office, PayPal, just put a hold on my account, stating that I provide false information. When they have my credit card, name, and address as well as my email address. I need to contact that law office. Thanks
I see it has been awhile, but here is that address.
ZEPEDA V PAYPAL SETTLEMENT ADMINISTRATOR
PO BOX 4199
PORTLAND OR 97208-4199
(877) 854-4514
Case No. 10-CV-02500 SBA
abc@aol.com if “settling” is what I should NEVER do, Then what would you suggest as a “proper” course of action in my situation? a buyer purchased an item from me, then decided it was not exactly what he was wanting it to be. so he filed a “not as described” claim via paypal I won the first round with paypal.
The buyer then proceeded to file a Charge Back through his credit card issuer, the merchandise HAS NOT been returned to me, paypal tossed my account into a negative balance status saying that I now owe the original purchase amount to paypal.
As far as I know the customer still has the merchandise, along with the money that paypal sent back to the buyer’s Credit Card used in the transaction. I got the “bill” but no merchandise.
It is my opinion that paypal assisted this customer in a commission of a crime but the legal arena tells me it is a “civil matter”
I attempted to contact the Law firm only got a recording saw the settlement late well after the closing date that is crap and I have encountered every issue that was listed including fraud my account is still closed with a balance that I am still paying. Plan went from using a card to using iphone apps making the use very difficult and discussing. I feel tricked….and baited into Pay Pal technology that I am not familiar with………
Now that people have given into PayPal and their so called settlement, they are placing even more 21 day holds on sellers accounts. They will make up any excuse to place holds on accounts and promote buyer’s to commit fraud and file dispute after dispute. If you call PayPal and are put on hold, you hear PayPal telling buyer’s to file disputes against sellers every 3 to 5 minutes. They encourage buyers to file fraud disputes and then hold the seller responsible. Even though you call PayPal to get some sort of hold lifted, you go through case proving the buyer never bothered to resolve anything with the seller, the buyer deliberately filed a dispute, or if you have overwhelming evidence that the buyer is fraudulent, PayPal still makes up excuses and blames the seller. This so called lawsuit DID NOTHING. Every single time PayPal gets sued, you people always accept the setltlement which means PayPal can continue ripping off sellers and stealing money. Every 30 seconds PayPal is being sued and every single time you people settle!
The fact is regardless of what you do, PayPal will find a way to steal your money. Get too many complaints due to PayPal, get limited, give refunds because you know the buyer is frauduelnt or disrupts your business, get limited, get chargebacks due to PayPal, get limited. Basically you get limited or holds placed for any transaction in which PayPal is not making money off you. And their excuse for holding funds directly form them is “oh its an industry standard / its a common practice” is there lame ass excuse to steal your money.
PayPal encourages buyer’s to file disputes against sellers, they allow buyers to blackmail sellers, PayPal will always screw over sellers.
If your a seller and get put a hold or limitation, DO NOT SHIP ANYTHING OUT! You are under no legal obligation to ship a product out to anyone unless those funds are physically sitting in the bank account. If you look at all the complaints regarding PayPal placing holds for 21 days, they say the funds are automatically released! That is a lie! Every single complaint sellers have regarding the 21 hold, everyone says the hold is still there after 21 days or after submitting tracking. When questioned PayPal 3 different times and said “what guarantee do we have that if we ship a product out with a 21 day hold, is there the funds are going to get released if we have tracking and delivery”. All 3 times the representative who worked int he limitations department did not answer. That means they know the funds will not be released and your going to have a headache. Never trusted Ebay and PayPal since the start and we will never!
If your a legitimate seller, our advice is not to ship any products out that you don’t have the funds sitting in your bank account. Leave the account alone for 60 days and use another payment service. You’ll see that the amount of fraud disputes from buyers will drop significiantly This is because the other payment service isnt blasting into the buyers head to file disputes left and right.