Did PayPal steal $250,000 from suspended accounts?

It occasionally happens that PayPal accounts for violations of the Terms of Use. Actually, the service then retains the credit for 180 days until the case is resolved. But in some cases, PayPal has not released the money even after that. A class action lawsuit accuses the company of theft.

Nowadays you often can’t get past PayPal. The online payment service is mainly used for purchases with small amounts. Sending money to friends or family is also considered a popular feature.

Occasionally, it may happen that PayPal user accounts for violations of the terms of use. Normally, the payment service provider then retains the credit for up to 180 days until the case is resolved.

But in the case of three Americans, the company did not release the amounts even after this period. With a class action lawsuit, they are therefore taking action against PayPal and accusing the company of theft.

No information after blocking the PayPal account?

As the US tech blog Ars Technica reports, the plaintiffs are three independent users who had relatively large amounts in their accounts.

The bottom line of the lawsuit: PayPal had not informed the three users about the blocking and had not informed them exactly which conditions they had violated. Information on how to regain access to their account would also have been missing.

The company also did not disclose how the plaintiffs regained access to their assets. In at least one case, it is even documented that PayPal demanded a judicial effect from the injured party.

“PayPal violates its own terms of use by failing to adequately inform users whose accounts have been frozen,” the lawsuit said. The lawsuit also referred to the use of the Terms of Use as a “license to steal.”

Over 250,000 euros confiscated from PayPal

One of the plaintiffs is a seller of hyaluronic acid pens. His accusation: From the account of his wife, 172,206.43 US dollars had been confiscated. However, after several letters and calls, PayPal said that the company had collected the money as “damages for violations of the terms of use.”

However, the plaintiff claims never to have received a copy of the Terms of Use. The matter seems even more complicated: PayPal later explained that the money was collected as compensation for the plaintiff’s customers.

The plaintiff requested a written copy of the refund forms. Although PayPal allegedly promised to deliver them within two days, nothing happened. The plaintiff has not received the documents to date.

A short time later, he received a letter that spoke of tax debts in the amount of 162,517.19 US dollars. That’s just under $10,000 less than the amount originally collected.

Plaintiffs want triple damages

“PayPal essentially claimed a deduction for an expense it never paid. The company seized $172,206.43 but reported only $162,517.19,” the plaintiff concludes.

In another case, the payment provider blocked an account because the owner sold yoga clothes far below the market price. In total, the company has seized around $250,000 in this way.

The lawsuit was organized by poker player Chris Moneymaker. The plaintiffs claim “triple damages”, i.e. damages in three times the amount of the damage. According to Ars Technica, the company would like to “comment on the allegations in due course through legal channels”.

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