PayPal Account Hold Class Action Settlement

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

CLICK HERE TO FILE A CLAIM »

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

www.AccountHoldSettlement.com

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