PayPal Account Freeze Class Action Lawsuit Overview:
- Why: PayPal allegedly unlawfully froze accounts without warning and subsequently seized their funds.
- Who: Three plaintiffs filed a class action lawsuit against PayPal.
- Where: The PayPal class action lawsuit was filed in California federal court.
PayPal Inc. unlawfully seizes account holders’ funds without informing them of the reasons behind the account freeze, according to a class action lawsuit filed last week in California federal court.
Plaintiffs Lena Evans, Roni Shemtov and Shbadan Akylbekov filed the PayPal class action lawsuit on Jan. 13. They each claim that they have used PayPal accounts for years before their accounts were frozen without warning or explanation and their funds were permanently seized after a 180-day hold period.
“This action stems from Defendant’s widespread business practice of unilaterally seizing funds from its clients’ financial accounts without cause and without any fair or due process,” the PayPal class action lawsuit states. The plaintiffs argue that PayPal’s policy amounts to theft.
Plaintiffs Allege PayPal Seized Funds Without Warning
Evans alleges she began using PayPal in 1999 when she opened her eBay account. She uses PayPal to buy and sell items. She also uses it for her nonprofit organization and to exchange money for a poker league she manages, according to the PayPal class action lawsuit.
Evans says her PayPal account was frozen without warning in November 2020 and that she learned on May 22, 2021, that PayPal seized nearly $27,000 from her account without providing a reason.
Shemtov has used PayPal to sell yoga clothing on eBay since 2014, the PayPal class action lawsuit says. In March 2017, PayPal allegedly froze her account and ultimately seized nearly $43,000.
In August 2020, Akylbekov says he learned that PayPal had seized more than $172,000 from his account. He says he did not receive an explanation about the seizure of his PayPal funds until he filed a complaint with the Better Business Bureau at which point he learned that the sale of injectable fillers that were not approved by the FDA violated PayPal’s User Agreement and Acceptable Use Policy.
The plaintiffs claim that PayPal has transferred their funds to PayPal’s own account, and that the amount seized has no causal connection to the damages PayPal actually suffered due to their alleged violation of the Acceptable Use Policy.
The plaintiffs filed the PayPal class action lawsuit on behalf of themselves and a proposed Class of other PayPal users who had funds seized by PayPal based on a purported breach of PayPal’s Acceptable Use Policy.
They are seeking compensatory damages, restitution, treble damages, punitive damages and injunctive relief that would require PayPal to stop engaging in the allegedly unlawful seizure of account funds.
Does PayPal have a right to seize customer’s funds without warning? Tell us what you think in the comments!
The plaintiffs are represented by Eric Bensamochan and Deborah C. Silver of The Bensamochan Law Firm Inc. and Eric Schreiber of Schreiber & Schreiber Inc.
The PayPal Class Action Lawsuit is Lena Evans, et al. v. PayPal Inc., Case No. 5:22-cv-00248, in the U.S. District Court for the Northern District of California.
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440 thoughts onPayPal Unlawfully Seizes Account Funds, Class Action Says
Is the Evans, Shemtov, etal v. PayPal case still active?
I need to be added to the class action law suit. PayPal took funds out of my account for fraudulent charges.
I would need to file against them too. They closed my account and put my funds on hold. $2960.75.
I only have two transactions on my account. One purchase I made and the deposit of my money.
They told me they are holding onto my funds in case someone files a payback against me. They already held my funds for 21 days for this. They still won’t give me my money. They are thieves. They caused me to loose my place to live. That was rent money.
This is a personal account not a business I don’t have customers who will ask for money back. Plus there is literally only 2 transactions altogether in my account.
I need help. Ware do I go!
Same exact thing just Happ to me as well .
Happened
PayPal seized. $23k from my account while I sold whole sale packages.
I’d like to be added to this class action suit
I would also like to be added to this PayPal took over $5000.00 from me and put me out of business and been banned from eBay on top of it
I want to sign up for the lawsuit with PayPal.. please
PayPal denies any wrongdoing, permanently limited my account •• Then PAYPAL LOCKED ME OUT FROM MY FUNDS.. AND WHEN I ASKED WHY I GOT THIS REPLY… WHICH DOESN’T MAKE SENSE BECAUSE I NEVER SET UP A BUSINESS ACCOUNT ~QUOTING PAYPAL ~After reviewing your business model and payment history, we have decided that we can no longer provide our services to you as a payment processor. This decision was made after thorough analysis and consideration of various factors, such as, but not limited to, risk of loss and risk to other PayPal users. This decision can’t be overturned. EVEN THOUGH IT WAS SUPPOSED TO BE BECAUSE I NEEDED TO SEND A PICTURE OF MY SSC I COULDN’T FIND. So I asked the lady that I was speaking through just let me a link if I can go back to the rain when I get my car she said yes when that never happened we froze out my old account and kept my buns it’s been over a hundred and twenty something days no emails you know nothing
This has happened to both my business and personal PayPal accounts as well both of my husbands accounts as well they just took money that was sent to us mad it impossible to purchase postage for orders and then permanently froze our accounts because of it.. they also just refund peoples money without any cause and put your account negative as well even when the person got their order and/or you have verified that the order was shipped… PayPal rolled me personally that sellers will never win a dispute because they gurantee that people get their order no matter the circumstances… the whole system is a complete sham