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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
Paypal is known to put money on hold.i have had my money on hold multiple times.it causes a lot of problems.
Existing customer as well been going through this 2015 or longer rediculous proof of transactions and deposit delayed withdrawals and everything as of now just got off the phone with a rep !!!😡😤 unbelievable
180 days ago TODAY PayPal permanently limited my husbands PayPal account only AFTER we had $3,200 deposited into the account. I was able to get out about $400 until they limited the account even after we gave them everything they needed & asked for. we only used PayPal to occasionally have $ sent to us from family or to sometimes send each other $ that was it. They’ve been saying for months now to me that once 180 days is up well receive an email & be able to withdrawal the rest of the $$ – I emailed every single executive email I was able to get my hands on with PayPal and after complaining to BBB one of the executives stated that on 5/26/22 I should be able to withdrawal all the funds- I’ve waited long enough!! I pray I’m actually able to since I’ve read nothing but horror stories of others having their entire balance taken away from them. This is so WILD that they’re even able to do what they’re doing!! Just deciding to hold peoples $$ so that they have an interest free 6 month loan to play with!? Sad excuse for a company!! They have ZERO compassion or empathy for their customers – f them
PayPal put a 180 day hold on my account and then at around 150 days transferred the entire $17,850.00 to themselves as “damages” from violating the acceptable use policy…. customer service was no help and could not even tell me what part of anything i violated i do not understand how they can take my money with absolutely no explanation whatso ever….somebody help me
My account was permanently limited without any prior communication or the ability to contest the action taken. They said funds will be returned after 180 days! This surely CANNOT be legal, they are outright thieves.
Holy crap! I was pissed that they have been holding $3,000 grand of my money for 179 days.. actually no 180 days TODAY.. I am “supposed” to be getting an email today stating how I can transfer my balance out but now I’m scared.. wow I can’t believe they kept $17,000 of your money!! That’s insane
SAme problem here, I was unaware I was breaking Rules with them, they held my money 180 days with nowarning just took my money for some kind of damages, Lawyer up and I willing to pay. Nail these people to the cross.
PayPal put limitations on my account for 180 days.,, After 150 days, they transfer my USD5200 to their paypal alleging damages to PayPal for violations of user agreement. Someone help me on how I can bring legal action against the company.
Will there be another lawsuit forthcoming?
I will be contacting my State Legislator hopunf thsy will enact legislation naming Paypal as the #1 crooks behind this type of criminal behaviour.
I’m willing to join claim as well. I’ve got funds held and paypal won’t even tell me why. a “risk” its been months and I had no issue with with buyers. but I’ ma risk..
How can I join this class action againt the compant.
I’ve filed complaint to BBB with my complain # is BBB CASE#: 901897
I emailed pictures and all
I told Paypal that I will be taking this on the news and to court. We received our Covid Relief funds and Paypal closed our account because we transferred from one account to another. Even by stating the reasons why they still sent the 180 day hold/ ban and basically said we don’t care about your family or care you need this money to survive. Customer service was no help at all either were the managers. Over $12,000 or our money was kept from us. In the end we managed to get only half of it back all because my wife told a big lie and said that we were going through a divorced and that I stole the money out of the other account. So a rep issued a dispute against my banned account to place some of it back to her account. Mind you this Paypal business account I had since I was 18 and I’m now 30, and been doing tons of transactions for years. This needs to STOP, the govt needs to hold these thieves accountable. During the worse Pandemic in history and Paypal is trying to capitalize on our money given to us to survive. Our 4 kids are literally depending on us to keep them safe and feed. I worked like hell this entire Pandemic and this money was suppose to be the cushion to ease the pain for our family. Please share my story and other stories across the world everyone. It is all I ask of you to have empathy which Paypal lacks. Change is possible if we work together and fight this evil.
Same thing happened to me they still have my Bitcoin that i was trying to sell when price was 59,000 and now it went down 42,000 they act like they above the law. And they wont give me no specific reason they made me blow my top and driving me crazy
My money is being held by the Paypal as well. This is illegal. I am from Europe, Slovenia. Please get back to me, if anyone is willing to take the lawsuit against Paypal.
File one I am going to