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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 Beryllium Sphere (r) on Monday January 17 2022, @04:07AM (3 children)
The only ways I could find to get money out of my Paypal account were to link it to my checking account or to give them my SSN for a Paypal Cash account.
In the early days there were horror stories about Paypal grabbing money back from people's checking accounts. If they're still doing that, well, my checking account is at a member-owned credit union unlikely to take their side, but it's still a risk.
(Score: 2) by tekk on Monday January 17 2022, @05:24AM (2 children)
It may just be because I *do* have a bank account linked but at least for me it gives me the option of them mailing my a paper check with my balance. it might only be available if you have a threshhold amount in there, though.
Honestly it was probably a bad idea to allow paypal to hold a balance regardless. That's what put us in this situation in the first place, though I can imagine it would've complicated things in the old days where they'd have to work something out with credit card companies for letting you get *paid* via your credit card.
(Score: 2) by Beryllium Sphere (r) on Monday January 17 2022, @04:49PM (1 child)
I like that last idea. Suppose they paid your balance as a credit on your credit card. Then if they tried to steal it back, you'd have all the credit card dispute protections on your side.
I was just sure that I had read about them using fine print that allows them to reverse transactions and making unauthorized withdrawals from people's bank accounts. Mistaken?
(Score: 2) by tekk on Monday January 17 2022, @05:16PM
I mean, it wouldn't surprise me. They certainly have the ability *technically* speaking: all banks care about is that they had still-valid debit card/routing info once and they're authorized to charge for all time.