PayPal Account Hold Class Action Settlement Checks Mailed

Viewers of Top Class Actions are reporting that they are receiving checks in the mail from a $3.2 million class action settlement over allegations PayPal Inc. improperly handled disputed transactions and improperly placed holds on PayPal accounts.

The PayPal class action lawsuit, titled Zepeda v. PayPal Inc., accused PayPal of improperly handling disputed transactions; placing holds, reserves or limitations on customers’ accounts without notice; and in some cases suspending or closing accounts.

So far, they have received checks worth between $11 and $23.15, according to viewer comments and posts on the TCA Facebook page.

Congratulations to everyone who submitted valid claim and got PAID!

According to the PayPal class action lawsuit, PayPal failed to provide customers with monthly account statements and error-resolution notices that are required under the Electronic Funds Transfer Act.

The plaintiffs, who used PayPal as sellers, allege they had funds in their PayPal accounts frozen for as much as 180 days but that PayPal failed to inform them about what had triggered the account freeze. The PayPal class action lawsuit also alleges PayPal failed to provide the plaintiffs with an opportunity to address the situation and avoid future holds being placed on their accounts.

PayPal denies any wrongdoing but agreed to settle the account hold class action lawsuit to avoid the burden and expense of ongoing litigation.

Class Members of the PayPal settlement include current and former PayPal users in the United States who had an active PayPal account between April 19, 2006 and Nov. 5, 2015 and who had a hold or reserve placed on the account and/or had an account that was closed or suspended by PayPal.

Eligible Class Members could choose between filing a basic claim, which would entitle them to payment based on the dollar amount of the longest hold or reserve on the account, or an alternate claim for actual damages up to $2,000. Basic claim payment amounts were estimated to range from $3 to $440.

In addition to offering cash payments to eligible claimants, PayPal also agreed to revise its User Agreement to add certain disclosures about its use of fraud and risk modeling, to change its policy regarding requests for information, and to disclose the reason for a hold, reserve or limitation (unless the disclosure is not consistent with PayPal’s security requirements).

The deadline to file a claim for the PayPal class action settlement passed on Oct. 14, 2016.

The PayPal account hold class action settlement received final approval on March 24, 2017.

Congratulations to our Top Class Actions readers who submitted a valid claim and got PAID! If you missed out, sign up for our free newsletter to receive updates on new class action lawsuits and settlements. You can also check out which class action settlements are still accepting claims in our Open Class Action Settlements section.

Class Members are represented by Quantam Legal LLC, Lexington Law Group, Farmer Jaffe Weissing Edwards Fistos & Lehrman PL and Seeger Weiss LLP.

The PayPal Account Hold Class Action Lawsuit is Zepeda v. PayPal Inc., Case No. 5:10-cv-02500, in the U.S. District Court for the Northern District of California.