A woman lodged a lawsuit in New York federal court Wednesday claiming that she was unable to access her sole source of funds and was subjected to excessive fees after signing up for a “no charge” prepaid PayPal debit card.
Plaintiff Ebony Morehouse claims she signed up for a prepaid debit card. She says she thought the card was serviced by PayPal, but, after losing the card at the start of the pandemic and spending months trying to report it, she found that the other defendants in her lawsuit, Netspend Corp and Bancorp, actually held the funds associated with her account. In addition, she claims that PayPal and the other defendants failed to disclose excessive fees she says she was assessed after signing up for the debit card.
Morehouse, a single mother living in New York, says she relies on public assistance to pay for necessities for herself and her young daughter. Morehouse, who suffered a stroke at the age of three and can only use one side of her body as a result, alleges that she and her daughter rely on less than $1,000 in benefits each month, along with food assistance.
Morehouse used a debit card administered by Netspend until November of 2019, but, due to poor customer service, the plaintiff says she closed the account and switched to what she thought was a prepaid card administered by PayPal.
The lawsuit contends that there was no way she could have known that the card she signed up for was not administered by PayPal. She says it was advertised as a “no charge” debit account through which she could access her social security benefits far sooner than a traditional bank account. The card allegedly had a PayPal logo on it and all communication sent to Morehouse came through a PayPal email address.
The lawsuit details Morehouse’s experience losing her PayPal debit card in March of 2020, at the beginning of the pandemic. Morehouse says she called the company as soon as she discovered that the card was missing, but was unable to reach a PayPal customer service agent to help her then, or in the twenty subsequent calls she made. She says she turned to the Social Security Administration who told her they could only change the payment if PayPal took action.
Morehouse says that she used every method possible to try and contact PayPal to no avail. She says that because she was unable to report the missing card and get a replacement, she was unable to access funds to stock up on food and other essentials. She points out that the food assistance she receives barely covers her and her daughter’s basic necessities. In addition, food assistance funds cannot be used to pay for protective equipment, toilet paper, and other necessities, she points out in her lawsuit.
She says she suffered severe emotional trauma in the months it took for her to try and get a replacement card from PayPal and support herself and her daughter. Finally, in July with the assistance of a lawyer, Morehouse says she discovered that the card was not administered by PayPal, but by Netspend.
When Netspend finally reissued her card, Morehouse says she discovered that she had been charged a monthly fee for the PayPal branded debit card, along with ATM fees and a foreign transaction fee.
Morehouse also says that she does not remember getting a disclosure or other information that would have notified her that Netspend or Bancorp was involved or that she would be assessed excessive fees.
Morehouse alleges that PayPal, Netspend, and Bancorp violated New York state laws by failing to properly disclose the terms of her prepaid debit card.
Have you paid excessive PayPal fees? We want to hear from you! Tell us about your experience in the comment section below.
The plaintiff is represented by Hazel R. Caldwell of Bronx Legal Services.
The PayPal Excessive Fees Lawsuit is Morehouse v. PayPal, Incorporated, et al., Case No. 1:21-cv-04012 in U.S. District Court Southern District of New York.
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26 thoughts onPayPal Allegedly Charged Single, Disabled Mother Excessive Fees During Pandemic
Please add me as well. PayPal has scammed me.
I want to be included as well I received lots direct deposit from unemployment and the SBA during the pandemic and racked up 1000s in fees that I was unaware.
Add me too. I’ve been investing in and using PayPal since 2015 and did not know of any problems.
Yes this has recently happens to me and my friend we lived with paypal being our primary bank of sending and receiving money for 5 years or greater well on Monday aug 2 2021 my friend sent me 240 dollars from her account to mine they froze our accounts and suspended them for 180 days with our funds said it was a threatening alert to them and we cant get our funds for 180 days she is a struggling mother of 3 widowed and I am unemployed due to covid so I do surveys that payment goes to PayPal to get by on I need a lawyer and I want to know is it legal for them to freeze our funds without a reason and when I asked them they would not tell me why
PayPal Credit has exorbitant fees that continue to compile interest charges for transactions that are months old. Currently, I just noticed that the finance charges for the cash advance recently dropped off while I continue to pay fees beyond what is fair and reasonable for a credit account PayPal closed.
omg they are a scam i was using them for the longest time so please ad me to your list and i thank you for doing so