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Apr-05-2011
08:05 AM
So in the forum I get no response, by email I am told to reread the terms which are the reason I am asking this question. Your terms say you would send me specific notification of reasoning for any holds or restrictions. You didn't do that. Maybe Paypal needs to read its terms and have somebody attend to my account per those terms and stop sending me canned responses. I've read the terms. Why do you hate me Paypal? We were doing so well...
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Apr-05-2011
08:00 AM
There is no telling at this point. I requested by email a copy of Paypal's specific reasoning for my reserves and got a response back with a link telling me to go read the terms as if I hadn't already. The terms say I should have received notification of specific reasoning. Its getting to such a point of absurdity its surreal. They have now cost me $150 in overdraft fees since yesterday because they wouldnt release a couple of refunds totaling just over $20. The post office lost three of my packages this month, one of which showed up empty with a whole in it to my customer and Paypal refuses to let me use MY MONEY to take care of it. Its almost like they are about to go out of business and know it, so they don't care about my business and aren't ashamed of it. Paypal needs to stop pretending like there isn't some kind of problem here. I'm not the lone voice. I've never seen a company since Enron draw such venom from the public via websites, forums, a class action and this forum.
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Apr-04-2011
11:32 PM
1 Kudo
35. PayPal states in the Agreement that “[i]f we have reason to believe that you have engaged in any Restricted Activities, we may take various actions to protect PayPal, eBay, a User, a third party, or you from Reversals, Chargebacks, Claims, fees, fines, penalties and any other liability.” These actions include closing, suspending, or limiting access to a user’s PayPal account or holding funds “for up to 180 days if reasonably needed to protect against the risk of liability.” (emphasis added). However, none of these restricted behaviors are applicable here, as PayPal has failed to identify any of these Restricted Activities to Plaintiffs and the Class as the reason for holding all funds in the account. 37. In opportune timing with the poor state of the economy, PayPal started holding funds in sellers’ accounts by placing reserves on accounts and/or limiting and/or suspending seller’s accounts and holding the funds in the accounts for 180 days (collectively referred to as “holding funds”). 38. PayPal has thus implemented a policy and practice of systematically and arbitrarily closing, suspending, or limiting access to its users’ accounts (collectively referred to as “holding funds”) without reason to believe that the user has engaged in a restricted activity. During this time, funds cannot be withdrawn from a user’s PayPal account. 39. Furthermore, contrary to the express and limiting language in the Agreement, PayPal, through exploiting nonexistent contract terms or vague and unjustified contract language and interpretation, holds funds for up to or in excess of 180 days. PayPal makes this decision to hold funds at its sole discretion, in violation of the contract. 40. During this hold period in which users are prohibited from accessing their own funds in their PayPal accounts, the funds continue to accrue interest. PayPal further benefits by retaining the interest accrued. 41. PayPal’s practice of placing holds on users’ accounts has met widespread disappointment and anger from consumers around the country, as evidenced by the numerous websites created to protest PayPal’s holding of funds. See, e.g., www.letssuepaypal.com, www.paypal**bleep**.com, www.**bleep**-paypal.com, www.aboutpaypal.org, www.paypalwarning.com. Typical comments on these websites include: “I'm from Northern California. They're holding around $18,000 of mine hostage for 180 days as of a few days ago. ….. I've uploaded every document under the sun and after jumping through their hoops they decided to keep my money anyways. I'm an honest seller with 100% positive feedback and ZERO charge backs….” Taken from www.letssuepaypal.com. “PayPal keeps holding funds on my account even though i have 100% feedback rating. They can't give me a reason, they just say it's policy….” Taken from www.consumeraffairs.com. “I've been using paypal as my transactions processor for 3 years or so, and have been pretty active the entire time, since I sell a lot of stuff on multiple sites. … I wake up Friday morning (January 29, 2010), planning to transfer the funds to my bank account, since all sales for the month had been completed... Low and behold, my Paypal account is frozen. …Needless to say, it's now a paypal horror story on the tune of $2,455.63. It took them 1 whole day to say they will hold my money for 180 days....” Taken from www.paypal**bleep**.com. “For no reason these [expletive] have decided to freeze all funds in my account for 180 days for no reason whatsoever…their excuse “report of suspicious activity”. Taken from www.aboutpaypal.org. “i have a paypal premier account and a paypal business account, on february 12th my business paypal account was limited because of high risk security concerns, 9 days after my paypal premier accounts has been limited because of the same…my business account remained frozen with over $2,400 dollars and the premier account was frozen with $597.00 dollars for 180 days…” Taken from www.consumeraffairs.com. “Holding auction funds to me from a buyer for (up to) 21 days.” Taken from www.consumeraffairs.com. “For over 60 days now. Paypal has $9,752.59 USD of my money!” Taken from www.aboutpaypal.org. 42. PayPal informed account holders of the hold on their funds through use of form emails or a prepared phone script which provided no information as to why there was going to be a reserve placed on their account and/or why their account was going to be limited/suspended for a period of time up to 180 days. 43. The email informs the users that their funds are being held for the following non- explanatory reasons: “excessive risk involved”, “security issues”, or “suspicious activity.” These terms are not defined in the PayPal User Agreement, and no further explanation is given. See Exhibit 1, Paragraph 15 (“Definitions”). 44. When PayPal users inquire as to the reasons behind why their account has a hold placed on it by contacting PayPal’s Resolution Center, as required by the User Agreement (see Exhibit 1, Section 14.1 (“Contact PayPal First”)), users were met with non-responsive and unhelpful customer service employees, “canned” responses, and/or a litany of requests for additional documentation, including social security numbers, and other personal information. 45. Even after users provide the additional documents, PayPal continues to withhold information regarding why the hold was placed, providing only a form email stating that they are unable to provide more information as to why there is a hold on the users’ accounts: “If you would like to obtain copies of the information we reviewed in deciding to place a limitation on your account, you will need to obtain a court order or subpoena.” 46. During the holding period, money is permitted to enter into the accounts, but users are unable to access the funds at any time until the holding period expires, up to 180 days. 47. Additionally, once funds are returned, PayPal retains the interest that accrued while Plaintiffs and the Class were frozen from their accounts. 48. As a result of PayPal’s actions, Plaintiffs and the Class have suffered damages, and eBay and PayPal have been enriched in the form of interest on the money held in the accounts without reason. 49. PayPal has not provided any real explanation as to why the accounts have a hold placed on them, and does not provide PayPal users with any guidance or criteria so that they can select customers and conduct transactions in a way to avoid PayPal’s hold policies. 50. PayPal has left Plaintiffs and the Class with no opportunity to obtain access to their funds prior to the expiration of the hold period, let alone understand the reasons for the hold to be able to prevent a hold, in the form of a reserve or a limitation/cancellation of their account, from being placed on their accounts in the future. California’s Substantive Law Applies To The Proposed Class 53. Also, California’s substantive laws may be constitutionally applied to the claims of Plaintiffs and the Class under the Due Process Clause, 14th Amend., § 1, and the Full Faith and Credit Clause, art. IV, § 1, of the US Constitution. California has significant contact, or significant aggregation of contacts, to the claims asserted by Plaintiffs and all Class members, thereby creating state interests that ensure that the choice of California state law is not arbitrary or unfair. b. Whether PayPal has a practice of breaching the terms of the PayPal User Agreement, or the covenant of good faith and fair dealing, by holding funds in its users’ accounts for up to 180 days without determining that such action is reasonably necessary to protect against liability; c. Whether PayPal breached the terms of the PayPal User Agreement by retaining the interest generated by the funds in closed, suspended, or limited accounts; d. Whether PayPal breached the fiduciary duties owed to Plaintiffs and the Class; e. Whether PayPal is obligated to refund the interest generated on closed, suspended, or limited accounts under theories of money had and received or unjust enrichment; f. Whether PayPal held electronically transferred funds in an unlawful manner; g. Whether Plaintiffs and the Class entered into a contract with PayPal by agreeing to its User Agreement; h. Whether Defendant’s conduct constitutes deceptive, unfair and/or oppressive conduct as defined under the California Unfair Business Practices Act (UCL) (Cal. Bus. & Prof. Code §17200 et seq.); i. Whether Defendant was unjustly enriched by its scheme at the expense of Plaintiffs and the Class; j. Whether Plaintiffs and Class have been damaged, and if so, in what amount; k. Whether Plaintiffs and the Class are entitled to restitution of all monies acquired by Defendant from Plaintiffs and the Class and the general public as a result of Defendant’s unlawful, unfair or fraudulent business practices; l. Whether Plaintiffs and the Class have been damaged, and if so, in what amount; and m. Whether PayPal owes Plaintiffs and the Class an accounting of the interest accrued on their funds while their accounts were closed, suspended, or limited;
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Apr-04-2011
11:31 PM
Please note that Paypal is innocent until proven guilty. I am making one central post here about this issue so as not to be unfair to Paypal. I had the issue today that so many here are upset about so I googled "Paypal" and the results were shocking. This is not in any way intended in malice toward PayPal, and I believe that if Paypal believes they are in the right they won't have a problem with leaving this thread up. This is strictly business, and any opinions expressed here are my own and not of PayPal. I am also not an attorney, but I am a very unhappy client. I believe that the amount of negative hits that come up by googling Paypal is in my experience far beyond the norm for a similar sized company. I see past suits involving Ebay that form a pattern of behavior, and just as Ebay holds us vary accountable for our service to others, so should we hold them accountable for their level of service to us.
Don't take my word for it either. Google it. There is a current class action forming for people like me who have had their businesses burdened by holds that in my opinion have suddenly become more severe for no reason that anyone could explain to my satisfaction.
I have to take responsibility and have my selling limited because six months ago I got one too many low item description DSRs. I believe we have a right with business in mind and not malice to hold Ebay/Paypal to equally high standards, and as of right now the legality of numerous practices affecting a large number of people are being called into question. I am personally trying to decide how to proceed and will speak with a professional before I make any decisions but I am open to working my problems out directly with Paypal after I consult a professional.
Here is what I received when I contacted the people heading up the class action.
FREED & WEISS LLC Chicago, Illinois 60602 4. Money received through PayPal is to be available almost instantly, unless a contractual exception applies allowing PayPal to hold the funds. None of those contractual exceptions are applicable to Plaintiffs and the Class. 5. Class members who inquire of PayPal as to the reasons behind PayPal’s actions are told PayPal will not explain its actions absent a subpoena. In other words, PayPal holds money belonging to Plaintiffs and the Class and tells them they have to get a subpoena or court order just to discover the reason why PayPal is denying Plaintiffs and the Class access to their own money. 6. The amounts PayPal holds for up to 180 days (or more) before release may range from a few dollars up to over a thousand dollars for each Class member. All the while, PayPal keeps the interest generated by the funds owed to Plaintiffs and the Class. FIRST AMENDED CLASS ACTION COMPLAINT
7. This case is not about PayPal’s right to hold funds for appropriate reasons. Rather, this case is about the systematic and arbitrary manner in which the freezing is done and the lack of information shared with affected customers in contravention of PayPal’s contractual and common law duties. THE PARTIES 8. Plaintiff Moises Zepeda is a natural person and resident of California, who operates a business selling gift cards through eBay. Plaintiff opened an account with PayPal to process the payments made on eBay. While Plaintiff operated his business on eBay, he received no complaints and had 100% positive feedback from his customers. In or about January, 2010 Plaintiff received notification that PayPal was holding the funds in his account for 180 days. PayPal held approximately $2,000 of Zepeda’s funds. 9. Plaintiff Michael Spear is a natural person and resident of Florida, who has been using PayPal as a seller since approximately December 2008. On or about December 2008, Plaintiff received a notification that PayPal was holding the funds in his account for 20-30 days. On or about April, 2010, Plaintiff received a notification that PayPal was again holding funds in his account. These monies have been frozen in his account as of the filing of this lawsuit. PayPal is currently holding approximately $145 of Spear’s funds. 10. Plaintiff Ronya Osman is a natural person and resident of New Jersey, who has been using PayPal as a seller since approximately 2007. On December 19, 2009, Plaintiff received a notification that PayPal was holding the funds in her account for 180 days. PayPal is currently holding approximately $1,500 of Osman’s funds. 11. Plaintiff Brian Pattee is a natural person and resident of Georgia, who has been using PayPal as a seller since approximately 1999. In or about September 2009, Plaintiff received a notification that PayPal was holding funds in his account for 180 days. PayPal held approximately $750 of Pattee’s funds, and released the funds on or about March 12, 2010. 12. Plaintiff Casey Ching is a natural person and resident of Hawaii, who has used PayPal as a seller since 2000. On or about June 2, 2010 Plaintiff received notification that PayPal was holding funds in his account for 180 days. PayPal is currently holding approximately $4,000 of Ching’s funds. 13. Plaintiff Denae Zamora is a natural person and resident of South Carolina, who has used PayPal as a seller since 2002. On or about August 1, 2008 Plaintiff received a notification that PayPal was holding funds in her account for 180 days. PayPal is currently holding approximately $5,012 of Zamora’s funds. 14. Plaintiff Michael Lavanga is a natural person and resident of New Jersey, who has used PayPal as a seller since 2001. On or about August 1, 2008, Plaintiff received a notification that PayPal was holding funds in his account for 180 days. PayPal is currently holding approximately $70,000 of Lavanga’s funds. 15. Plaintiff Gary Miller is a natural person and resident of California, who has used PayPal as a seller more than one thousand times since 1999. In or about July 2010 Plaintiff received a notification that PayPal was holding funds in his account for 180 days. PayPal is currently holding approximately $8,300 of Miller’s funds. 16. Plaintiffs are informed and believe and thereon allege that Defendant PayPal, Inc. is a Delaware corporation doing business in the State of California. PayPal’s corporate headquarters are located in Santa Clara County, California. 17. Plaintiffs are informed and believe and thereon allege that Defendant PayPal, Inc. is a Delaware corporation doing business in the State of California. PayPal’s corporate headquarters are located in Santa Clara County, California. 18. Plaintiffs do not know the true names or capacities of the persons or entities sued herein as DOES 1 to 10, inclusive, and therefore sue such defendants by such fictitious names. Plaintiffs are informed and believe and thereon allege that each of the DOE defendants is in some manner legally responsible for the damages suffered by plaintiffs and the members of the class as alleged herein. Plaintiffs will amend this complaint to set forth the true names and capacities of these defendants when they have been ascertained, along with appropriate charging allegations, as may be necessary. FACTUAL BACKGROUND 24. PayPal operates an online payment processing service. The service allows a consumer of goods or services purchased over the Internet to electronically transfer money to the seller of the goods or services. PayPal boasts 81 million active accounts (and 210 million total accounts), with over half of PayPal’s total revenues are generated in the United States. 25. Typically, an online retailer will include a link to PayPal on its website. When the website’s customer is ready to make a purchase, the customer will click the PayPal link, which will take the customer to a secure PayPal webpage. There, the customer will provide PayPal payment information. Once the payment is processed, the customer is returned to the online retailer’s website. 26. PayPal is the “preferred” payment method for transactions completed on eBay. eBay is the dominant online auction website, with a virtual monopoly over the online auction industry. eBay has more than 90 million active users globally, making it the world’s largest online marketplace. In 2009, there was $60 billion worth of goods sold on eBay, which is about $2,000 every second. 27. A PayPal user who uses the service to pay for something purchased online has several payment options. According to the PayPal website “You can use your PayPal balance, bank account, or a debit or credit card.” 28. A PayPal user who uses the service to accept payment for something sold online also has options on how to receive payment. According to the PayPal website, when selling on eBay, “[m]oney from your eBay sales appears in your PayPal account after the item sells. Choose to transfer the funds to your bank account, or keep them in your PayPal balance to pay for sales costs or purchases – it’s up to you.” 29. Online retailers who sell products through their own websites, as opposed to sales made on eBay, have similar payment options. Money can be transferred immediately to a linked bank account or left in a PayPal account. 30. PayPal actively encourages sellers to leave the payments they receive in a PayPal account, asserting that “PayPal is accepted at thousands of websites, and it provides a fast, secure checkout,” thus making it easier to “spend it through PayPal.” 31. PayPal also offers a “PayPal Debit MasterCard Business Card [that] lets you spend the money in your PayPal account or withdraw it as cash at ATMs.” 32. When a balance is maintained in a PayPal account, PayPal keeps all interest that these balances accrue. In fact, use of PayPal is contingent on granting PayPal an irrevocable transfer “[of] any ownership right that you may have in any interest that may accrue” on the balance maintained in a PayPal account. This transfer is “in consideration for your use of” PayPal. PayPal’s User Agreement and Wrongful Holding of Funds 33. Users of PayPal must agree to the PayPal User Agreement (“Agreement”), attached as Exhibit 1. The Agreement states that “PayPal is only a Payment Service Provider. PayPal helps you make payments to and accept payments from third parties. PayPal is an independent contractor for all purposes, except that PayPal acts as your agent with respect to the custody of your funds only.” 34. The Agreement lists numerous “Restricted Activities,” conduct a user agrees not to engage in while using PayPal. PayPal also has an Acceptable Use Policy, which lists further prohibited activity.
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Apr-04-2011
10:51 PM
2 Kudos
What are you scared of exactly? I am joining a class action suit. It is not to be malicious to PayPal but the legality of many of their policies is being called into question by legal professionals, and this is business. What are you suggesting they will do to me?
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Apr-04-2011
10:38 PM
I have been having the same issue time 10 and so are a lot of people.
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Apr-04-2011
09:16 PM
Wow thank you for sharing your thoughts on my role as a seller on Ebay. I know you intended it to be helpful and thats what I appreciate about the community. You confirmed for me that I was on the right track six months ago when I last earned a low DSR of any type. However I am a believer that cynicism and negativity are at best innocuous and at worst a cancer that spreads between people I focus solely on the perfect rating I have acheive and been repeatedly congratulated for by Ebay and the fact that my DSRs have been perfect since that time which was my first month to ever attempt to sell a product online. Also its not germaine to the topic here since that specific guideline is not mentioned in Paypal's terms as a reason that holds could be placed on my money, and even if it were the past class actions that Ebay chose to settle out of court clearly were a challenge to the legality of such holds. It is also irrelevant to the curious nature of Ebay's reluctance to place its brand in plain sight on the Paypal page, which is consistent with the Anti-trust suits that have been brought against Ebay in the past. While segttlements are not an admission of any wrongdoing I'm sure you'd agree if you saw them that not one of the actions brought against Ebay has resulted in any favorable result. Companies can certainly put things in fine print and tuck brand logos away yet still be compliant, however those actions attract suspicion as they imply that Ebay doesn't feel comfortable with the fact that Paypal is a part of Ebay. This is reinforced by looking at Half.com's layout, another "separate" Ebay-owned company where an Ebay logo exists on almost every page including the home. Why so shy on Paypal? So if I can offer constructive positive criticism that helps you in return I'd say, that seeing your willingness to help identify my issues clearly shows a spirit of service and helpfulness, you probably want to focus on issues that would be helpful to the most people possible. In order to do that I think we have a responsibility to hold Ebay accountable for its track record, which would help both sellers and buyers. So I think to focus on my one DSR over the limit from six months ago is only helpful to me, bringing to light Ebay's track record of repeatedly getting negative feedback in the form of suits for alleged violations of the law would be helpful knowledge to everyone doing business. Corporations have laws they must abide by much the way an individual does. I am proud to say I have been a positive citizen in upholding the law to the best of my ability, and while not being perfect, I sleep peacefully knowing with 100% sureity that I have not commited any crimes against my fellow citizens. Ebay has the same right to due process of law as an individual does and is always innocent until proven guilty. However the sheer number of suits, litigants, class actions present and settled are a form of feedback even if they do not guarantee guilt. Just like my DSR trend clearly indicates that I made a foolish mistake at the outset of my venture here, it is not proof of or an admission of guilt either. But we all know patterns are telling and my pattern is that last year in my first month I did not review the item conditions policy closely. Ebay has been is is continually, presently being sued for the same things repeatedly, far more often than other marketplaces. The sheer number of negative hits by only typing "Ebay" or "Paypal" into Google is staggering. It is far beyond the normal amount of inevitably unsatisfied customers a similar sized corporation has. The number of websites people spend their money on to spread the word that they feel PayPal has treated them poorly is a terrible feedback rating. If Ebay held all its companies to the same high standards that make my 100% feedback rating "not good" to you and Ebay, they would shut down. If twenty people on this site accused you of commiting a crime against them Ebay would close you down. But if you look through the press releases one recent states it received an ethics award. That tells me why it continues to face litigation for the same issues; denial and people who don't research companies before giving them awards. If Ebay gets an ethics award in the face of so much negative feedback about its ethics, I believe you should make an "item describer of the year award for me." I am only one low DSR away from Top Rated Seller Status and I have shown a six-month pattern of correcting my behavior. Ebay would be banned from its own marketplace as it just keeps getting sued yet insists itself worthy of ethics awards. So if you want to help even more people than just me I'd say all you need is a simple checking of your own priorities when deciding who needs to be be taken to task for their track record. But thats easy to fix so I'd say you are doing great! I appreciate the chat and exchange of ideas with another open minded soul. Cheers!
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Apr-04-2011
06:06 PM
There is a lot of fishy goin' on and there is a class action brewing from a Chicago law firm Freed and Weiss. It alleges that we are owed any interest made on held funds and that many of these experiences are ruining otherwise viable homebased business. You pay to list, you pay a final value fee, donate 10% to a charity, then Ebay hits you again as Paypal with another final value fee, holds your money, earns more interest and if you have a refund to process, they take it from your bank instead of your reserve, and come back later and take your donations from your bank as well. Why do I, a small business owner have to front this mega conglomerate money it could have taken off the top for charity or released the hold to pay. I have to front my own refund and I can't just give back the money the customer gave me. I guess the CEO needs lunch money.
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Apr-04-2011
05:54 PM
That's great Sandy. I wish I could make sense of it but for me it was well past my 100th successful sale that after a smooth ride they just started holding everything to the point where its crippling. I have 84 ratings left in 200 transactions which is a decent rate to get feedback period and I'm at 100%. I can't imagine what changed as I only improved an already good reputation. I hope I am the exception but apparently but as I found out today this isn't their first class action over this issue and they tend to settle, so I'm thinking where there is smoke there's fire. I sincerely hope your ride stays smooth and prosperous.
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Apr-04-2011
02:58 PM
Definitely don't add anymore. They kept asking me to add so they would loosen restrictions that were never noticable, and now all the sudden I cant' even process a refund out of my own money. I would read through this before I did anything else. Ebay owns Paypal and if you look at any other site Ebay owns the Ebay logo is prominent, except here on Paypal. Why? I'm hoping to get these answers http://www.freedweiss.com/10-08-13-22-FAC.pdf
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