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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
How do I get information on a lawyer fighting this. I never use Paypal unless I have to. My Remax realtor paid me rent on a home I own in Belize in the amount of 1000. I do not sell anything, only use this when it is the only means. I have had like 3 transactions on Paypal in 20 years, 2 have been paying landscapers/property managers in Belize, 1 was an amount from my relator. Then they send me something saying it is being held for 180 days, I violated the agreement because I was selling something that was sexual material. I don’t sell anything!!! I call and they say they will correct it in 24 hours and I will be sent an email. They did nothing. They cannot even show that I sold anything. Just got 1000 from my Remax Realtor. I can’t believe this. It’s absolutely theft and criminal. This is intentional. I believe they hold these funds and draw interest, invest or something. Count on millions of people letting small amounts go. I am going to look into this with an attorney on Monday.
– Same case here. We believe we have not violated user agreements because it was the first time we accept payment by Paypal, we just start using it although the business account was registered last year. dothefive
– So we logged in paypal and it requests us to submit business transaction and ID etc. after uploaded all relevant business registration documents, later on the same day we receievd email notifying that we can no longer use Paypal, the funds in the account will be held for 180 days, and may also face high penalty from them and so on.
– We don’t mind removing Paypal as payment method for our store but we still have USD$36 in the account from our customer (after Paypal ripped off $2 as service fee), but we cannot get it back. So we called the hotline and the support staff asked a few questions and told us to wait for their email for result of review.
– The 2nd day after the call we received an email to login Paypal to see their message, which is in the Message Centre, which says that “Regarding your previous contact with us to appeal the account. After another detailed review by the review department, it is decided to maintain your account permanent limit. And this is final.” …
– Paypal is a scammer which should be banned by the monetary authorties around the world
I won over $4500 and developers have confirmed my winnings amount and that information paypal won’t allow me to have this is wrong because inusedy ssi federal social security funds to.play a couple games and won and now.my linked bank account paypal loced.into there systems and locked.$4,500 dollars and my personal info
1100 $ freez for 180 days without any explanation…
A mi me han robado 2000 euros y pienso demandarlos. Son unos ladrones sin escrúpulos, no se ni como pueden seguir operando y no les cierran el chiringuito. Ojalá quiebren cuanto antes, jamás he conocido unos ladrones “legales” tan descarados
I would like to be added to the law suit because PayPal froze my money of $6808.99 with no warning nor reason since 11/09/2020 and continue to give me the run around about getting it back. 1st I am told I will get an email on how to retrieve my funds as of to 10/26/2022 I have not received an email from them. A couple of representatives tried going through the process with me to retrieve my funds and then said they have no other information as to why I can not receive my money. I have had this account since 1999 selling sending and receiving money. I sold from a catalog. I’ve sold lingerie and adult novelties. I bake, do hair and nails, make gifts and keepsakes as well as knit and crochet to make money. I also used it to pay my rent and other bills. I stopped selling lingerie and adult novelties around July of 2020 do to me losing business because of the pandemic and I was in the process of relocating because my house was not fit to reside in, so I sold everything I had from file cabinets to display cabinets to maniquins, as well as all of my inventory to help with my moving cost. Because the froze my account without warning I was not able to move until the following year. This completely broke to the point I maxed out my credit cards my bills were over due and to this day I am still playing catch up. I also sent in my EIN #information and the receipt of the itemized list of what was sold. There was no delivery information because it was picked up from my location. I just want my money please help me get it back as well as money for the pain and suffering me and my family had to indure through this process.
How do we get added. I am in a similar situation. Please let me know what options or steps I need to take.
going through same situation the whole thing over $21,000 we sent numerous of letters including attorney letters with no response. I’m getting very worried now that they’re going to scam us and take our funds.
Try the better business buerro they were able to help my friend
Same here, sold products on eBay and received funds using PayPal. PayPal frose my account and asked me to wait for 180 days, after 180 lapsed, I tried to login to withdraw the fund, the money was gone, no notice, reason, or recourse provided.
Hope to join a class action to sue thief Paypal.
Lrock021@outlook.com
Paypal currently has my income on hold. It was a digital art project. My account is in good standing, its a BUSINESS account and I have never had customer complaints. I’m very frustrated unable to talk to someone and its going on 3 weeks now. How is this good business practice???? They also charged me to receive payment for the project. I shall never use them again. Good luck with your lawsuit. I believe you have a very strong case against them.
How can I do something they stole over $2000 and won’t let me even withdrawal my money saying got no wait six months they keep giving me run around I just want my money
Here is story what happen:
Let’s see where do I start this I won money online casino and put it into my PayPal $2,555 they then tell me account is limited that I did something illegal that gambling isn’t allowed first off in Pa it’s not illegal to gamble well they then took over $2000 from my account and saying they didn’t but now they permanently limited my account and they telling me I can’t touch my money MY MONEY for six months