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PayPal stole users’ money after freezing, seizing funds, lawsuit alleges:
PayPal is facing a class-action lawsuit alleging that the digital payments company violated racketeering laws by freezing customer funds without offering an explanation.
When users contacted PayPal about the frozen funds, they were told they had violated the company's "acceptable use policy" but weren't told how that violation had occurred, the lawsuit says. What's more, it alleges that in at least one instance, PayPal said that a user would "have to get a subpoena" to find out why.
"PayPal violates its own Agreement by failing to provide adequate notice to users whose accounts have had holds placed on them," the lawsuit says. When PayPal does let users know it placed a hold on their funds, "it does not inform such users why such funds are being held, how they can obtain a release of the hold, and/or how they can avoid future holds being placed on their accounts."
It also says that PayPal takes the money for itself after a 180-day hold period. "PayPal's user agreement and acceptable use policy cannot be used as a 'license to steal,'" the complaint says.
[Ed. Note: one of the payment options to subscribe to SoylentNews is through PayPal. We practice safe operations and periodically withdraw funds from our PayPal account and deposit them to our bank account. We use the same technique with Stripe. To my knowledge, we have not had any problems with any of our payment processors.--martyb]
(Score: 0) by Anonymous Coward on Sunday January 16 2022, @09:01PM
Do you have any ideas about why your account was frozen? In particular, did you ever get an email like the one I pasted-in below?
I had an incoming PayPal payment (USD $400) frozen once, but it was resolved in a few days. It was from Europe and the abbreviation of their organization name was one letter different from a well known international terrorist group. Here [with some bits "de-identified"] is the initial email I received from PayPal:
I sent in a written explanation, including the expansion of the suspicious-looking acronym, and also the URL for that same org. Everything was back to normal in a couple of days. No more problems, balance never frozen, just the one transaction.
I've mostly stopped using PayPal this year, for a different reason. It's the new Federal rule that payment processors like PayPal have to file IRS Form 1099-MISC for account holders that receive more than $600 in a year. I was receiving more than that every year, but it went straight to an informal non-profit. I ran these payments through my PayPal account for convenience. Last thing I need to be getting is a 1099-MISC for income that isn't mine (IRS will demand I pay taxes on the amount)! At some point that non-profit org may get their own PayPal account.