PayPal Faces Lawsuit for Freezing Accounts and Taking Funds
PayPal is facing a class action lawsuit from users who have had their accounts frozen and funds taken by the company without explanation. Two of the plaintiffs are from California and one from Chicago. They are accusing the company of unlawfully seizing their personal property and violating racketeering laws.
They’re now proposing a class-action lawsuit on behalf of all other users who’ve had their accounts frozen before and are seeking restitution, as well as punitive and exemplary damages, Bloomberg reports.
Lena Evans was a PayPal user for 22 years. She said the website seized $26,984 from her account six months after it got frozen without ever telling her why. She used PayPal to buy and sell clothing on eBay, to exchange money for a poker league she owns and for a non-profit that helps women with various needs.
Fellow plaintiff Roni Shemtov said PayPal seized over $42,000. She received several different explanations when she contacted the company such as using the same IP and computer as other Paypal users, selling yoga clothing at 20 to 30 percent lower than retail. or using multiple accounts. She denies the latter.
Shbadan Akylbekov, the third plaintiff, said PayPal seized over $172,000 of his money without explanation. He used the account of a company his wife owns to sell Hyaluron pens, which are needle-less pens that inject hyaluronic acid into the skin. After the money disappeared from the account following a six-month freeze, PayPal allegedly sent a letter to his wife saying that she “violated PayPal’s User Agreement and Acceptable Use Policy (AUP) by accepting payments for the sale of injectable fillers not approved by the FDA.” It also said that the money was taken from her account “for its liquidated damages arising from those AUP violations pursuant to the User Agreement.”
Frozen PayPal accounts have long been an issue for many users. Sometimes the problem gets resolved after many phone calls and other times PayPal ends up taking those funds. One high-profile case was American poker player Chris Moneymaker’s who had $12,000 taken from his account. He was in the process of asking people to join him in a class action lawsuit before his funds were “mysteriously returned.”