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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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430 thoughts onPayPal Unlawfully Seizes Account Funds, Class Action Says
How do I get into this!!! I’m going through this right now. The merchant and everyone told me that I canceled the order. I called PayPal within a minute and was told the order was cancelled as well. Now they took a charge out of my bank. I’ve got proof from merchant who said when PayPal releases the funds they will refund me. Then my bank gave me statement copy saying PayPal took the money. Then I disputed. They told me an e heck was my Normal account activity and wouldn’t resolve my unauthorized use claim. I even appealed. I’ve NEVER WRITTEN AN EXHECK EVWR IN 8 years through PayPal. Also they have shown me no proof they don’t have my money. Also got a fraud alert about this charge. They just stole my money now? Help!
they froze my account with 5,000, i managed to get 3,000 back but after the 180 days they just took the remaining 2,000.
So is this a classacti against PayPal or what?
How do we submit a claim they are so dirty and they blocked my ability to take screen shots on the app.
And up until recently I had no simple way of getting an activity report or balance to submit to my landlord for recertification of my lease. And they have frozen funds from me I don’t know how many times. I was even a member on I hate PayPal on Facebook
Please help us file suit as well, they are destroying our business by holding a weeks worth of funds. $6155 plus employees lost wages we lost income and food has spoiled they need to pay for damages. We had to close for three days because we had no inventory.
They frose my account also then drained it after 180 day please ad me to the law suit
Would like to be added to this class action suit. Currently in the same situation as most on here. Have been given different reasons why my account is limited. Have about $9,000 being held. I’ve used them for over a year with no issues, charge backs, complaints or anything. All of a sudden they limit my account with no notice. Received funds from the same customer serveral time with no issue. Please add me to this.
Paypal froze $16,000 between my husband and I. Every time my 180 days came up, they said it would be longer. They would not give a reason beside you violated the terms, which we did not. Paypal ended up blocking our phone numbers so we could not reach them. We would have to use different numbers and finddifferent ways to try to get ahold of them. We could not get an attorney in PA to fight Paypal. They released about $12,000 and stole close to $4,000. DO NOT KEEP MONEY IN YOUR PAYPAL ACCOUNT!
To get them to release some money- we wrote a demand letter and kept calling (it took the whole day some days). Most paypal representatives just didn’t want to release it. We got a hold of a representative who did help us, by luck. He couldn’t get the funds to be released that were already taken. (The funds that were taken- were taken a few days before the first 180 days). It’s a shame. Its not like Paypal isn’t already a giant but they need to steal, too.
Please add me They are holding $6155.05 from our restaurant business which is a whole week of income, we are on the brink of closing because of this action.
Please add me they held 923.00
Pleas add me they are holding 12546.00 of my money for over 2 years now n account still visible online but can’t transfer balance
How can I get on this lawsuit? They have my account on hold as well.
Yes. Both husband and I had accounts that were frozen. Took YEARS to fight, never got our money back
Does Paypal have right to seize funds ? Not No but HECK NO they do not have a right to take other people’s money for any reason I’m not allowed to take your money or their money how would they feel if the government started questioning them about their identity or or things they use as a reason to question one about their account if I have a card in my wallet that’s not issued to me they question it people don’t always do things that make sense to others but 99% of the time they have a good reason for it and I don’t think PayPal is using adequate reasons for seizing people’s money
Agree 100%