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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
Today when i opened my checking account, I noticed a ” Paypal Transfer ” for $450.
That’s weird, I knew i haven’t bought anything. I opened paypal, but there is no trace of any such transaction. I dont have any active subscriptions or recurring payments and i have checked who has permission to accept payment from my account. I have taken a closer look at my checking account and there 7 transfers over last 6 months for total $2400. My bank will only protect me for 60 days $1200.
How could paypal authorize a transfer, and not send me an email as they do for every other transaction? Or has my bank account been linked to another paypal account, in which case how could my bank authorize a link or transfer without an email and my knowledge ? ( TD Bank ) .
I have done a search and this unauthorized transfer has happened before to others , but Paypal is not taking responsibility. I believe its grounds for a Class Action.
TD Bank said they can protect 60 days but beyond that is iffy , but they said they will follow up with Paypal and ill be notified in 7-10 days.
I had PayPal take out 198.00 out my account just a day ago and I had like 10 other transactions as well I sent them email It wasnt authorized I had people blocked from.it well my debit card isn’t on it and my checking but some how they stole my money again every time I contact paypal they do nothing how can they take your money with out authorized to do so if people are blocked they are still getting my money out my account this is like the 12th time I’m tired of PayPal taking money out my account when I didnt authorized the payment on my account and did not receive a request I think this is bullshit ,I want my 500.00 back into my account my bank wont do anything about it
I am so pissed. PayPal has froze my account and want give me my money. They said I have to wait 180 days to get it. When I ask why they said my account looks like a high chance of. Payments getting reversed. What the hell I had more activity a few months ago then now . But they are letting people still send m money. This is bull crap. I talk to manager Steven and he just said that is how they do it . I want my money: Everyone get your money out of PayPal they are thief’s
#paypal
I say we file another lawsuit. They are STILL doing the same thing. They are currently holding my money, illegally! HOW DO I FILE A LAWSUIT?
I have not received my check from paypal my account was suspended and they kept my money
PayPal hasl ocked down my account for the last 180 days, yesterday the holds were released. I transferred $20 to my greendot debit card, and the assholes locked down my account again. I have family suffering from covid-19 and I haven’t been able to work for weeks. I need MY money this is rediculus and saddening, I know that I’m not the only one
I’ been ripped off by eBay and paypal. I want to join the class action lawsuit today.
Still have not received my check from the settlement as of December 13th,2017. i been with PayPal since 2005 ongoing until now.
What happens to UK PayPal accounts? I have had many problems using PayPal in England,eBay Inc State:It is Mandatory for all sellers to use PayPal as a buyer payment option? What happens when PayPal Refuse to comply with that Mandatory Obligation? I have had problems for years using PayPal,at the moment PayPal have Stated:they do not Want my custom,have Frozen my account (Today 28 Nov.17) will Not accept buyers payments for any item I sell on eBay,have refused to accept buyers payments for items I sold on eBay in 2015,Refused to accept my payments for 12 items I bought on the eBay web site,over a six month period,so what do I do? eBay have Stated,I must still use PayPal,How can I use PayPal when they State,they will NOT accept buyers payments? have Frozen my account,even after they Promised to clean up their act,Rubbish.they will continue to Treat customers with Contempt,because they know eBay will Protect them.
My goodness Pay Pal is so shady! They have been doing this for years!
Paypal claims administrator is as shady as Paypal, everyone should write the judge. A joke of a settlement to start with and then they don’t pay and don’t even send deficiency notices, denials, or respond, when I had two valid claims.
Still doing at even after the lawsuit, they should face criminal charges!!
This thing took so long, does anyone remember if they were going to send the checks to the present address in the PayPal account, or do they require an address change notice if I moved?
Anyone get a check? nothing here