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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
My money is being held by Pay pal this is out of rage people had kids to feed and bills to pay
PayPal just yesterday closed my account and put my funds on a 180 day hold.. and still hasn’tgiven me a reason ECSEPT that I WHENT against the USER AGREEMENT POLICY.. but they won’t tell me how or when.. see I just opened my PayPal account about month ago.. in order to have my PA, UNEMPLOYMENT DIRECT DEPOSITED TO IT.. SO I COULD 1.. GET MY PAYMENTS FASTER. and 2.. BE ABLE TO USE MY PAYPAL CASH CARD INSTEAD OF THE PA, UNEMPLOYMENT pay debit card.. now right as soon as I got my first two payments from unemployment.. PAYPAL PUT LIMITATIONS on my account.. which kept from ACCSEING MY UNEMPLOYMENT MONEY. SO SO AFTER I DOD WAT THEY TOLD ME TO DO.. WHICH IS GO TO THE RESOLUTION CENTER. AND GO TO RESOLVE LIMITATIONS AND COMPLETE THE STEPS IN ORDER TO HAVE THE LIMITATIONS REMOVED AND TO REGAIN FULL ACCESS TO MY ACCOUNT.. WELL I DID AS THEY INSTRUCTED ME TO DO.. AND AFTER I COMPLETED ALL THE NESSISARY STEPS.. I THEN WAITED PATIENTLY FOR TVE CONFIRMATION EMAIL… WELL ON THE FORTH DAY OF WAITING.. THAT EARLY MORNING I RECEIVED AN EMAIL.. STATING THAT PAYPAL HAS CLOSED MY ACCOUNT AND THAT MY FUNDS R ON A 180 DAY HOLD.. BUT THEY R STILL MESSAGEING ME.. AND STILL CANT TELL ME EXACTLY Y THEY HAVE CLOSED MY ACCOUNT AND PUT MY FUNDS ON A 180 DAY HOLD.. ECSEPT THAT THEY REVIEWED MY ACCOUNT.. AND THAT I MIGHT B A “HEAVY RISK” FOR THE MONEY SERVICE AND THEY ARE PARTING WAYS WITH ME.. I NEED MY MONEY LIKE NOW.. I HAVE KIDS THAT DEPPEND ON THAT MONEY TO LIVE.. THEY R HARMING MY TWO CHILDREN BY WAT THEY R DOING.. MY KIDS CANT Wait 180 days for PayPal to possibly release the hold on my money.. how is this leagal at for PayPal to treat me like this and my children.. plz someone HELP!!!!!!!!
We’ve had our business paypal account for nearly 15 years now. About ten years ago they pulled the ‘hold a percentage of all monies for a period of time’ routine. After 6 months or so they stopped doing that. Yesterday out of the blue I received a vague email stating that our account has been permanently frozen. All funds ($4,372.46) are being held for 180 days. Nothing has changed about the products we sell, how we do business or where we do business. Nothing in 15 years has changed. They gave no explanation via email, no explanation via phone and no response to my email request for more details. We need our $4,372.46. This is so unfair. This must be illegal. I have sent a letter to our district congressman.
They did me the same way put a hold on my account couldn’t tell me why did you ever get your money back
PayPal claimed a “Violation of UA” and froze my biz account 6 months ago and seized the $$ with zero explanation. I tried to call and got nothing and was even told there was no way to escalate the claim. Emailed to no avail. Reported them to the CFPB and they couldn’t intervene as PP is not under FDIC oversight. PP released the funds 6 months later but will not let me close the account. They told me to “consider the account closed” but the account is not closed and they still will not tell me why they closed it. They told me that by using PP I had agreed to the UA changes that may have taken place since I first opened the account. I want to close my account but PP said over the phone it is not possible. How is that legal that I can not close an account I opened without any explanation?
Ok. The *ABSOLUTE* way I see it, this PayPal “Money On Hold” is a total bullshit smokescreen!!! When they HAVE your money, they are taking it and blowing it into the stock market!!! Basically PLAYING WITH OUR MONEY TO MAKE MORE MONEY!!! THIS SHIT HAS GOT TO END!!! PAYPAL LAWSUIT PART DEUX!!! BURN ‘EM TO THE GROUND!!!???
PayPal just put a hold on my account with no explanation. The csr was useless as well. It looks like there has been class action lawsuits against them already for doing this to people. How can I go about getting my money. This seems illegal.
paypal is putting a rolling reserve on my money. When I owe them money they get interest. They hold my money nearly a grand, and for an excessive amount of time. my vendors want their money within 30 days. why can they keep all my money and not a lower percentage. How am I to pay paypal for credit purchases when they hold my funds hostage.
The claim form link is inactive
You should file a small claims lawsuit, not a class action. up to $5000 hurts them more than $18.00 and they deserve it. Yes I have a Paypal account and they have been holding my refunds for weeks.
I submitted a claim and still haven’t received anything and I did try before the 60days to reach the administration/Class counsel & still nothing back I have my claim submission number as well
I have a paypal claim to file but site will not allow me to get the form or get to the site. Can you help me or send me to another site to file my claim. Thank you.