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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: 2) by looorg on Sunday January 16 2022, @09:18PM (1 child)
Probably part of the usual AML (anti-money laundering) issues again. They have to "know" their customers or they can or are basically forced to close their access and account and by that seizing all the things associated with said account.
So if you sell some dodgy stuff via ebay (seem just selling things below what ebay considers to be "retail price") or just get paid from the wrong people or accounts yours could be closed to. Guilt by association or receiving money from the wrong sources.
That said what kind of idiot keeps $400k in their paypal account? She should have known better.
Your bank could in theory do the exact same thing as Paypal here. If the bank thinks they don't know you as a person or customer they can freeze your account and close it.
(Score: 0) by Anonymous Coward on Wednesday January 19 2022, @12:18AM
No, the bank can't do that. What they do is report you to the FBI who then order an account freeze and asset forfeiture. The bank doesn't get to keep your money, it goes to the government.