Putative class action against PayPal for holding sellers' money

http://www.complexlitgroup.com/PayPal-Holding-Money.shtml

by 1337biz • 14 years ago

58 25 14 years ago

dangrossman5• 14 years ago

Some law firm seems to attempt this very same class action suit every year, all the way back to the original case in 2002 that was settled with no admission of wrongdoing. This firm's the proud owner of this domain from 2010: http://www.letssuepaypal.com/

I don't think any of these cases have gone anywhere. All banks offering Visa/MC card acceptance have the same "we'll hold your funds for 180 days if we close your account for risk/fraud reasons" term in their contracts, the same as PayPal's User Agreement. Doesn't seem to be illegal.

viggity• 14 years ago

sure, but you should be able to have some kind of recourse to be able to dispute the fraud allegations, right?

dangrossman5• 14 years ago

No, I don't believe you should have that. PayPal can choose who it wants to do business with, the same as you or anyone else. If they've closed your account and held the funds, it's because they decided there is too much risk associated with doing business with you. A process to dispute the decision not to do business with you, with the possibility of winning the dispute, is tantamount to forcing two parties into a contract, which goes against the very spirit of contract law -- that of agreement between two parties to enter into the arrangement.

They hold on to any funds still in your balance for only as long as it takes to ensure you can cover chargebacks and reversals on your own payments, then disburse them to you and your relationship is ended. I don't think adding a dispute process to this would better the situation. It may be frustrating to have someone decide not to do business with you, but it's not illegal, and shouldn't be something you can dispute.

davidpayne11• 14 years ago

Only a Freelancer would understand how shitty and shady Paypal's actions are. I hope someone else better than them replaces them soon and hope this case buries Paypal into the ground. They offer the highest transaction rates and lowest currency conversion rates...one of the shittiest companies I've ever dealt with.

brdrak2• 14 years ago

Have you found any better alternatives out there? I'm planning to start freelancing again and was planning to use Paypal.

zoneinfinite• 14 years ago

Stripe will probably beat PayPal if it finds a way to expand internationally quickly.

autophil2• 14 years ago

I'm using Skrill Moneybookers in adjunct with PayPal, but not to replace it (yet).

pm24601• 14 years ago

I use Payoneer.com to pay my Russian developer. He seems to like it.

OzzyB• 14 years ago

Listen, you're doing yourself a huge disservice by accepting payment by credit card for "services rendered".

I don't care what other credit card services are out there that seem to be more friendly than PayPal -- it doesn't matter -- you will always be at the mercy of Visa/Mastercard's policies, and they exist to empower the cardholder, not the merchant/provider.

Asking for a cheque is fine, put it in your bank, wait for it to clear, go party.

brdrak2• 14 years ago

That's a fair point, but using checks has its own issues, no? For one, it can take forever to get one, so I think makes sense for larger payments from established clients.

What about a use case where a new client wants some emergency work done and I tell them, fine, happy to work on this, please go here and buy 2 hours of my time at an emergency rate.

autophil2• 14 years ago

I'm with you 100%, which is why I offer an alternative payment method (Skrill moneybookers). It's working out well enough, and I know I'm at least doing something about it.

Moral of the story: if you're not already, offer an alternative and never rely wholly on PayPal.

kjhughes• 14 years ago

Yawn.

Wake me up when I can join a class action suit against lawyers who chase high profile cases, win mega payouts for themselves, and leave the harmed with $1 checks or worthless discount vouchers.

I long ago stopped wasting time reading most class action lawsuit participation notices I receive.

batista• 14 years ago

>Wake me up when I can join a class action suit against lawyers who chase high profile cases, win mega payouts for themselves, and leave the harmed with $1 checks or worthless discount vouchers.

This makes the assumption that the only reason to join a class action suits is to be compensated or make money.

How about to punish the entity that did you harm and stop it from doing it in the future? I could not care less if I made $0 on such a class action, if the end result was that PayPal was forced to reconsider it's ways.

malandrew3• 14 years ago

Exactly. I have especially despised Paypal/eBay since they started doing this and I don't care that lawyers make tons of money on this so long as Paypal is punished and learns a lesson.

kalininalex2• 14 years ago

My impression is the primary purpose of class action lawsuits is to stop bad behavior, not necessarily to enrich plaintiffs. Lawyers do make quite a bit of money IF they win. They also take all the risks since class members don't pay anything for legal services upfront. So, class actions seem to be an important mechanism for correcting bad behavior of larger entities.

Putative class action against PayPal for holding sellers' money

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