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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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429 thoughts onPayPal Unlawfully Seizes Account Funds, Class Action Says
I filed suit against PayPal in Jackson County Circuit Court in Michigan. I was ordered to arbitrate. I appealed that order and The Court of Appeals recently denied my appeal so I am currently preparing my application for leave in the Michigan Supreme Court.
I am looking for similarly effected parties as described here that may want to join with Amicus Briefs.
this happened to me….they claimed it was for security reasons but they kept my money
My PayPal account was frozen as well. Same thing as everyone else said. No explanation, no way of getting my funds back. I was also a customer for years. That was very shocking to see what I thought was a reputable company just drop the ball for me, and apparently a bunch of other people. I’m joining this class action for sure
From NYC , PayPal froze my VA disability funds back in December 2023, stating they didn’t know who the acct belonged too…Although i had the acct for a decade! Over the years, there has been numerous breach of security! This was the last straw…So i went to the VA and had my VA funds desposited in another acct…But PayPal still is holding onto the funds that was deposited by the government for those 4 months that the acct was frozen! Paypal had the nerve to text me they are taking out a monthly assessment fee for an account i no longer have too…Nor has there been a replacement card sent! PayPal is a fraud and needs to be completel6 shut down and bankrupt! They are a den of communist thieves!
Okay they just did this to me as well. I am in Michigan. HOW CAN WE JOIN THE CLASS ACTION LAW SUIT?
I had 2 accounts banned and was given no reason as to why. It’s in their policy to email you why your account is limited. So they are basically going against what they claim they do. I have spoken with someone on the phone as well as several people through chat/message. This should be a class action lawsuit that includes everyone across the US at least.
Paypal out of the blue sent message on my Paypal acct saying my acct is limited and my acct can no longer be used and my funds will be held for 180 days and my card that is link to it can’t be removed .I have never had a problem with paypal .I know is my money better get put back in my acct I don’t even have a business acct.they are scamming people nd and taking our money abd putting it in their personal accts.
Después de trabajar 5 años co paypal vendo joyería artesanal en etsy, Paypal ha decidió cerrar mi cuenta y congelar mi dinero, sin explotación alguna. He pedido una explicacion a paypal y no han querido dar.
My acct was just frozen by Paypal for no apparent reason, after being forced, I verified myself and the funds in my acct with my client contracts then was told I could no longer do business with Paypal with no explanation. This has to end!!!
froze $2600 in my account gave me no reason why it was frozen
now its missing and Im barred for life
How can I join this Class Action?
We need to somehow collate some data how, where and when people were permanently banned because this is a global phenomenon. No point in speculating why we have all been banned. Luckily I never kept money in PayPal but I used it from time to time to negotiate business. For some reason, PayPal no longer wants us as customers and just citing a vague infringement of Acceptable Use Policy. I am more concerned that people have had assets seized because of this. The inconvenience of not being able to use PayPal is another matter. For any of us to consider class action lawsuits in different jurisdiction’s we need to collect data first to try and get a picture what is happening. I can live without eBay but it is the principle of treating all your customers fairly that I feel like should be a moral and legal obligation.
Paypal out of the blue sent message on my Paypal acct saying my acct is limited and my acct can no longer be used and my funds will be held for 180 days and my card that is link to it can’t be removed .I have never had a problem with paypal .I know is my money better get put back in my acct I don’t even have a business acct.they are scamming people nd and taking our money abd putting it in their personal accts.