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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
PayPal has frozen my account as well they say I receive funds from a buy and I had no knowledge of this and now my account is frozen
I was glancing over in Google and I kind of just read the article the funny thing is this the first time that I had used PayPal in a long time but I’ve never had problems in the past but they stole now almost $4,796 from me and they’re claiming it’s supposed to be 24 hours and now it’s going to turn into 48 hours and I see what happened to the rest of them they put it on hold for 180 days I hope that doesn’t happen to me but I need to be added to the lawsuit as well this is also mind you my SSI money I don’t know if that helps or what but I need some help somebody if you know anything or anything like that please let me know
Plz add me to the PayPal lawsuit they have taken and held Nemours amounts of my business act and personal acts and freeze them and tell me itsvon hold for 180days for no reason than I never recive my money and I also have had my act hacked there’s charges i never did my act is almost -300 there no possible way I could be negative or have them charges there a joke I’d love to get sum of my money back plz help me ty
How do I get in on this? I too have had my account frozen since March 31st 2021 and have been denied access to the money in my account. I’ve talked to them numerous of times and they told me they will not respond to any of my attempts anymore
Please add me to this ad well. PayPal has frozen two of my accounts as well as completely limited me to any access to my accounts as well! I didn’t realize so many people had this problem!!
I can not get into Paypal at all
Please ad me to this lawsut against PayPal..
How do I become part of the class action lawsuit against Paypal. They are racial profiling against minority account holders.
My account was limited and now permanently limited with no explanation.. no one will call me and when I did get someone to talk to they said they would transfer me to there supervisor and the call would get dropped every time. I can’t get refunds that are owed to me, can’t use my credit line, can’t receive or lay customers with PayPal… I’ve been using PayPal eBay fir 20 years with out a problem until this last year.
Please add me to your Lawsuit, PayPal is holding my money with no legal right. They also kept me on a phone dispute for 1hr 40 min talking to people with such bad broken English that l couldn’t understand them, they also called my customer for services rendered and asked her for her last 4digits of her SS number. She hung up because she couldn’t understand the person asking. They have no right calling people and asking for information like that.
Please add me to this case! Paypal is one of the reasons I was set back while bootstrapping my company. They held money from my business sales, refused to lift the hold. I had to pay for ALL of my customers shipping out of pocket for weeks because they would not release my money. I spoke with countless reps, up to the presidents office, I sent countless emails and they did not budge. Their excuse was I was receiving too many orders in a short amount of time! Hello! I obviously dedicated enough time and effort to make sales! Im in business and holding my money stops my cashflow which in turn hurts my business! Especially a bootstrapping business!
I also want to be added in this lawsuit, Paypal unlawfully gave me a permanent ban the moment I sold my synthesizer on Reverb.com and without previous notice. So practically they let the transaction happen (the buyer’s money are pending in my account already) but banned my account as soon as this was processed. That’s some terrible customer service and a very disturbing theft, just to begin the new year!