
Putative class action against PayPal for holding sellers' money - 1337biz
http://www.complexlitgroup.com/PayPal-Holding-Money.shtml
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dangrossman
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
sure, but you should be able to have _some_ kind of recourse to be able to
dispute the fraud allegations, right?

~~~
dangrossman
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.

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kalininalex
Financial industry is strictly regulated. Otherwise, imagine what would happen
if banks could freeze your accounts freely, leaving you out without any means
to pay for food or housing. Paypal could be that for larger merchants who
could have substantial part of their assets tied up at Paypal.

What I find interesting is that Paypal is essentially a bank, yet it's
completely unregulated.

~~~
dangrossman
But there is no regulation on banks that would affect this policy. Actual
banks that offer merchant accounts do the exact same thing. They can and do
freeze your merchant account freely, leaving you with no access to any
undisbursed funds.

I've been through this myself. I had a merchant account about 8 years ago,
underwritten by First National Bank of Omaha (the largest private bank in the
United States). I got a couple large, unexpected chargebacks all at once from
a single scammer that used multiple stolen cards. FNBO decided to create a
reserve on my account for several days while they reviewed my account, then
decided to terminate it due to the chargebacks. They held several thousand
dollars of my money for exactly 180 days before returning it to me. That's
money I needed to pay vendors and pay my bills - and it was perfectly legal
for this regulated bank to hold it.

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kjhughes
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.

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batista
> _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.

~~~
malandrew
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.

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davidpayne11
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.

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

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

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hrbrtglm
Stripe seems to be the perfect one, wepay looks like a great competitor to
PayPal, in fact all the great payment processing companies are US only, I'm
desperate finding a good solution available in europe, working in France as
far as I'm concerned. Finaly, I'll go with PayPal, just because it's the only
one working worlwide without a merchant account.

