Paypal is now hit with a nationwide class action, case number CV10-2046, which challenges PayPal’s fraudulent practices of “holding” funds for up to 180 days in the accounts of entities and consumers that collect wages and/or payments for product and services through the PayPal system.
The action states that PayPal systematically and arbitrarily has frozen funds in PayPal accounts for up to 180 days and sometimes even over 300 days without providing any explanation or factual basis for its actions. PayPal has the use of the “frozen” funds during this hold period and keeps all interest accrued during this hold generated by the funds.
PayPal has more than 81 million registered accounts worldwide and is now one of the leading ways to pay online. Recently, in opportune timing with the poor state of the ecomony, PayPal started placing reserves on accounts and/or limiting and/or suspending seller’s accounts and holding the funds in the accounts for 180 days. PalPal placed holds on funds of users who not only sell on eBay but also who use PayPal as a method of payment on their own websites and jobs that pay via PayPal.
PayPal informs account holders of the hold on their funds hrough use of a form email which provdes no information as to why there is a reserve placed on their account and/or why their account was limited or suspended. When PayPal users contact PayPal’s Resolution Center, users are met with non-responsive and unhelpful customer service, “canned” responses, a litany of requests for additional documentation such as social security numbers and tax returns, and even after entering the PIN that PayPal provided, were transferred to a non-working number.
Class members who inquire of PayPal as to the reasons behind PayPal’s action’s are told PayPal will not explain its actions without a subpoena. In other words, PayPal holds money belonging to Plaintiffs and the Class and tells them they have to get a subpoena or c ourt order just to discover the reason why PayPal is denying Plaintiffs and the Class access to their own money, which is legally and rightfully the Plaintiffs money.
Causes of action of this Class Action are as follows:
First Cause of Action: Violations of the California Unfair Business Pratices Act and California Consumers Legal Remedies Act.
Second Cause of Action: Conversion.
Third Cause of Action: Breach of Contract.
Fourth Cause of Action: Violation of the Implied Covenant of Good Faith and Fair Dealing.
Fifth Cause of Action: Breach of Fiduciary Duty.
Sixth Cause of Action: Violation of The Electronic Funds Transfer Act, 15 U.S.C. 1693 et seq.
Seventh Cause of Action: Unjust Enrichment.
Eighth Cause of Action: Declaratory Relief Pursuant to 28 U.S.C. 2201.