June 14, 2004 4:38 PM PDT

PayPal settles customer suit

PayPal has reached a preliminary settlement with some customers who accused the eBay unit of illegally freezing their funds.

The company on Friday said it will pay a total of $9.25 million to settle the federal class-action suit, $3.4 million of which will pay lawyers' fees and costs.

PayPal admitted no wrongdoing in settling the claims, which were filed in 2002 as part of two federal class-action suits that also alleged other customer service deficiencies.

Those two cases were merged, and a third case, pending in California state court, will be dismissed if the settlement agreement is approved.

"In this agreement, PayPal does not acknowledge that any of the allegations in the case are true," PayPal said in an e-mail to customers. The unit "entered into the settlement agreement to avoid further costs of litigation and to devote resources to more productive areas of our business."

An attorney for PayPal customers called the settlement a win not only in securing a financial reward, but in changing the way PayPal does business.

"I think we got it right," said Daniel Girard, a partner with Girard Gibbs & De Bartolomeo in San Francisco. "The settlement provides for cash recovery and also for a series of changes to the operating procedures at PayPal."

Between June and September 2003, while the litigation was still pending, PayPal released $5.1 million in frozen customer funds, Girard said. As part of the settlement, PayPal agreed to change the way it handled dispute resolution.

PayPal acknowledged that the settlement included an injunction mandating certain changes to the company's procedures, but maintained that the modifications had come about independent of the litigation.

"PayPal has always been looking for ways to improve customer service," said company spokeswoman Amanda Pires. The litigation "didn't really change the way PayPal has been operating. We have improved our customer service as part of our normal course of business."

PayPal claims 45 million member accounts around the world.

The settlement was the product of mediation, begun early last fall, before a court-appointed special master. Within a week, the parties plan to file the preliminary settlement with the U.S. District Court in San Jose, Calif., for approval.

The case involves PayPal customers who used the service between Oct. 1, 1999 and Jan. 31, 2004. European Union residents are excluded.

PayPal said it will publish the allocation plan in July or August. Customers will be informed of settlement terms within two months of the court's preliminary approval.


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PayPal still holding over $11,000 of my money!
PayPal needs a lesson in customer service. After several months
of 100% positive feedbacks on over 330 items, I sold some items
in May and I still have yet to be able to collect my money from
them or be able to refund over $11,000 of my money - though I
have done absolutely nothing wrong... they are simply trying to
cover their saftey concerns and don't care that I am not able to
get my money... they said up to 180 days! I am (or maybe was)
an eBay PowerSeller, and now that I can not pay my eBay fees,
even that account may be lost. I sure would like to knwo the
lawyers that handled this, maybe they could help me - eBay ID:
hireauctions - let's help PayPal get better for us all!
Posted by cjgarrison (2 comments )
Reply Link Flag
paypal is holding my $8500.00 for 6 months, contact me if we can help each other out
Posted by chakwalimunda (1 comment )
Link Flag
PayPal, Inc. blocked us from our funds.
Consumer's Original Complaint :
On 11/29/07 after we listed 2 very successful products on eBay from time period 10/28/2007 as user cooldeals2go and generated over 24,000.00 in sales for a four week period, PayPal, Inc., restricted access to our funds (which we cannot transfer $11,999.69 USD in funds to our bank account) and had eBay close/suspend our account cooldeals2go.
we were not selling any items that are illegal and our products were down loadable from the Internet and did not break any copyright violations.
we did notify PayPal, Inc., by phone to prior to 11/15/2007 to to let them know to expect an increase in sales so they would be provided with what we were selling, we also own www.hostitplanet.com and reconfirmed them about our sales. Therefore we felt we were clear with notifying them, we bought and paid with our PayPal, Inc., Inc. credit card an auto mobile and the had some services that were paid prior to them blocking access to our funds. (which they have blocked any payment being sent out) so we risk loosing our vehicle and reputation as a citizen in our area. also the restriction has caused eBay to suspend our account which means loosing an estimated amount of $3,000.00 in sales per day and the inability to send products to our customer totaling around $2,500.00. We have contacted PayPal, Inc., Inc. 5 times in a two day period from the time they restricted us, and supplied all requested information which we can verify we sent.
via screen shot to the items we submitted we have also some disputes from October that PayPal, Inc., has neglected to deal with for over a month.

If you have a similar issues, go here for
PayPal Problems, Information, Issues, Class Action Lawsuits - PayPal
Don't want to deal with PayPal go here
(alternative)Accept Credit Cards Online Today!
<a class="jive-link-external" href="http://www.paypalwarning.com/home" target="_newWindow">http://www.paypalwarning.com/home</a>
Posted by cooldeals2go (1 comment )
Link Flag
I have as of 08-11-2011 experienced DOUBLE BILLING / FRAUDULENT billing from EBAY and PAYPAL !
I had $ on my Debit Card to pay ebay fees, but ebay did not accept $ from my debit card, then i mailed in
an $70.00 postal money order to pay my ebay fees ; 3 days later they got the payment, my negative ebay
balance was gone ! I made a $75.00 sale and spent that $ in turn to by something for myself ! BINGO both
EBAY and PAYPAL again are trying to collect "the previous amount due from the failed credit card pament
attempt" although THAT BILL was paid for by POSTAL MONEY ORDER !

I have sent EBAY and PAYPAL multiple EMAILS telling them to STOP because they have caused my SAVINGS ACCOUNT to be charged SERVICE FEES 6 times, totalling over $200.00 ; my bank tells me I OWE THEM the
$200.00 ??



theAMBULANCES alone ?
Posted by prophetlivingood (1 comment )
Link Flag
That's why I transfer Pay Pal funds to my checking account after receiving an auction payment.
Posted by (1 comment )
Reply Link Flag
Pay Pal admits no wrongdoing !
This is a drop in the bucket for the Tyrant.

Don't get me wrong, I am glad to hear that Pay Pal agreed to settle, and will pay 9.25 million (unfortunately, I am not a part of the lawsuit)... Nobody pays 9.25 million if are innocent... But I would have preferred to hear that it was ordered by a Judge, rather than reached in a settlement where they admit no wrong doing. But fighting a giant like Pay Pal can be tiring, and I can understand the need to settle instead of fighting in court forever.
Posted by etoussier (1 comment )
Reply Link Flag

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