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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
Ok i just contacted paypal to request proof of my account that was suspended by paypal and that my funds ware on hold, paypal stated that they cant provide me with documents and that i need to submit letter to paypal legal department and ask in writing for one. Paypal legal department 2211 north first street, San Hose CA 95131.
That would be San Jose, not Hose. Thank you!
How do I have supporting document if i never received any monthly statement. On top of that, after my account was limited, I have no clue what my balance was because i couldnt access it. So what money i had, big or small, I cant even prove to them. I am very very upset. They only proof I have is that they sent two emails dating back to 2011 and they were a month apart. One stated that they put a limit on my account due to no active activities and then a month later another email stating they want me to prove my identity because of multiple users under my account which is BS! I really want to be part of this claim, but I dont want to waste my time if I cant prove my balance in my account. What should I do???
Sorry but thats bull. When they limit or suspend your account you still have limited access to your account and you can see what your balance was or is. I am so glad that they are weeding out the fraudsters finally. Leaves more money for the legit sellers who actually got burned.
You can not see your account balance past like two years. It wont let me see mine past August 2013 and I had an account 2011. So sorry but you are Bull, stop picking on people, its not going to change how much you are going to get. It is silly that they ask for proof, the fact is that paypal gets you social when you sign up so they should know who they screwed over and should pay ever person.
I simply went onto my paypal and account, the first page that came up says that my account is limited and they will withhold all money for up to 180 days, at the bottom of that page it has a ID number or some sort. So I took a screen shot of that page, then I went into my account history and looked up all cases that had been filed against me. For me I had none, so I took screen shot of that and sent that as well.
i guess im really not understanding this whole thing when i dont have a paypal account if i do its news to me i alwaysuse a pre paid card when i order stuff n still have been 100% positive costemer for buying things of here. yes i have bought few things and they never came in when it said it got delivered or paid for one thing and them tell me they were outta stock theyed contact me when they got it in but for some reason my bought history disapiers after a week or 3 so i cant see what i have bought its very fustrating to me
my account was closed for no reason all my money was on hold for days, how can I obtain supporting document call paypal and ask for it?
What documentation? Are you kidding me? Paypal has all the information. We cant even look in the acct and see when they held our funds. We couldnt get the info then what makes you think we can get it now?
Oh man they did this to me! Never received an item, asked for a refund/ charge back and they limited my account. I was unable to have access to any payments I received as a seller, any research surveys I had done I had no access to the payment that was sent. I was unable to pay for any of the goods I had ordered even though my bank account and card were legit and up to date. All because of a charge back!! Went back and forth for a month with their automated emails. As a result of this I ended up with bad feedback from angry customers(which means everything when youre a seller), refunds and MY money that was locked up because Paypal wouldnt give me access. Glad I saved those emails!
I was forced to chance over to PayPal from Bill me Later. And my account was on hold until I made the change.
Bill me Later is PayPal as a con to trick you into using their crap. I will suggest you to make the most out of it.
Pay off and get the limit increase as much as you can. When you think you can have a good vacation with the money or may be give to a charity for good cause, then tell PP to F themselves.
The collection agency will call and just simply tell them it is dispute between you and PayPal that has nothing to get involve with outside party.
The debt will not show in your credit report at all as I refused to pay until PayPal settle the crap they did.
So far two years and they are still trying to get me but no way for them to snatch from my bank account nor card. I still use eBay to buy stuff and pay with CC so they cannot charge anything extra other than what was authorized as the CC companies will not take their shit.
Be patience and build a good relation, what ever they say just reply politely and then screw them at the ast moment with everything you could. That is how you say “Biatch!” and flip the middle finger to those crooks.
Can not open Claim Form, But I did get an email about it.
I had only one account during this to,e period and had to pay fees to keep my account active And having issues with claim form mot working
I had filed for Nationstar Mtg lawsuit last Oct or so, no response yet???? Whats up? I know that it is over, how do I check on the results?