Abraham Jewett  |  August 27, 2021

Category: Credit Cards

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PayPal
(Photo Credit: Michael Vi/Shutterstock)

PayPal Class Action Lawsuit Overview: 

  • Who: Plaintiffs filed a class action lawsuit against PayPal Holdings, Inc. 
  • Why: Plaintiffs claim PayPal misled investors by not disclosing it was under investigation by the SEC and CFPB for allegedly unlawful PayPal Credit and debit card practices. 
  • Where: The class action lawsuit was filed in a California federal court. 

According to a new class action lawsuit, PayPal misled investors by failing to reveal in a timely manner that it was under investigation for its disclosure controls and procedures related to the company’s PayPal Credit and debit cards.

On Aug. 26, the law firm Gainey McKenna & Egleston announced in a press release that the class action lawsuit had been filed against PayPal Holdings, Inc. This marks the second class action suit against the company filed this month.

A similar class action lawsuit, referencing the same alleged PayPal misconduct, was filed by a plaintiff in California earlier this month. In that suit, lead plaintiff Huei-Ting Kang alleged the company inflated its stock price by withholding “damaging information” from its quarterly reports. 

PayPal only disclosed it was being investigated by the U.S. Securities and Exchange Commission (SEC) and the Consumer Financial Protection Bureau (CFPB) in its second quarter report to the SEC on July 29, according to the class action lawsuit.

The plaintiffs, who were not identified in the announcement of the class action lawsuit, claim PayPal’s alleged conduct makes it at an increased risk of regulatory investigation and enforcement, making its debit card and PayPal Credit revenues unsustainable. They want to represent a nationwide Class of consumers who purchased or otherwise acquired PayPal publicly traded securities between the period of Feb. 9, 2017 and July 28, 2021.

The plaintiffs say PayPal disclosed in its second quarter report that the CFPB filed a Civil Investigative Demand with the company to see how it was marketing its PayPal Credit feature with merchants in the education sector. PayPal also revealed it had been subpoenaed by the SEC so it could determine if the interchange rates the company paid to banks that issued PayPal-licensed debit cards was in compliance with Regulation II of the Board of Governors of the Federal Reserve System, according to the class action lawsuit.  

The SEC also inquired about PayPal’s reporting of marketing fees that it had earned from its branded card program. Plaintiffs claim the company’s stock dropped 6.23 percent the same day news of PayPal’s second quarter report came to light, according to the class action lawsuit. 

Are you a PayPal stockholder who feels the company withheld important information? Let us know in the comments! 

The plaintiffs are represented by Thomas J. McKenna, Esq. and Gregory M. Egleston, Esq. of Gainey McKenna & Egleston.


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43 thoughts onPayPal Failure To Mention It Was Under Investigation Cost Investors, Says Class Action Announcement

  1. Jody says:

    Go to fairshake.com… they are handling my lawsuit with PayPal and they don’t charge a fee unless they win it for you. Highly recommended!

  2. Jody says:

    PayPal froze my account. Took my $20,000 after the 180 days… Suing them through fairshake.com. PayPal came back with an offer of $540. I rejected that offer of course. They came back with another offer of $800. I also rejected that offer of course. They want to offer $800 out of $20,000? And they also threw in with their offer to not disclose with anyone their offer or settlement. First of all, for them to even make an offer, that’s guilt. Second, why can’t I talk about what THEY did wrong? PayPal will be out of business soon!

    1. Moneicia Hollington says:

      Add me

  3. Taylor Miller says:

    Please add me

  4. Charles Miller says:

    Add me. PayPal would not close my account even after they told me whoever hacked my account was hacked by someone else. There message while I was on hold states
    ‘ The safest way to to transfer money is with PayPal. So why is it they still have my account? Why it is they can still say it is the safest way to do business with them ? I would not recommend using this company to anyone. I am a veteran with enough problems of my own, let alone getting my account hacked and hacked again. And this is coming from a supervisor at PayPal who told me about this. After talking with them several times, over several calls, a supervisor was the only one who could help me because their employees could not help me.
    Add me please. I know a lot of companies get hacked daily and this needs to stop !!!

    Add me too, please.

  5. Kathy says:

    Add me

  6. antionette burts says:

    add me i have a Pay Pal card

  7. Catrina Diamond says:

    Add me

  8. Ashley says:

    Anyone have a lawyers info if PayPal took $11,589 from me after holding for 180 days?

    1. Jody says:

      Yup! PayPal took my $20’000 after the 180 days… Contacted my lawyer n PayPal wanted to settle out for $540! Rejected the offer of course, and they came back with an offer of $800! Out of $20,000? I don’t think so! I’m still pursuing them! Go to fairshake.com… if you don’t win, you owe them nothing! It’s worth it… They’ve been great handling my case!

  9. KYRA HARRIS says:

    I HAD PAYPAL AS WELL

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