PayPal faces a class action lawsuit in the United States. The accusation: The company froze customer accounts and claimed money from the affected users for itself after a period of 180 days.
The complaint was filed on January 13, 2022. We’re talking about three PayPal users who the company is allegedly withholding money that rightfully belongs to them. According to the lawsuit, PayPal is said to have confiscated around 250,000 US dollars without giving any understandable reasons.
The PayPal lawsuit is based on these allegations
The cases date back to 2017. At that time, according to the lawsuit, Paypal initially debited 10,000 US dollars from the account of the user Roni Shemtov. According to her, another two years followed by around 32,000 US dollars. Several contact attempts by the womanShemtov were initially unsuccessful. Eventually, she managed to speak to three different employees of the company. According to the lawsuit, the first contact person justified the debit by saying that Ms. Shemtov had violated PayPal’s terms of use because she logged in from the same computer and IP address that other PayPal users used to go online. A second employee told her that she was illegally using multiple PayPal accounts, which the lawsuit says is not true. The third reason Shemtov was given by another employee was that they were against theviolated PayPal’s Terms of Service by selling yoga clothing 20 to 30 percent below retail.
According to the lawsuit, another user named Lena Evans, who has had an account with PayPal for 22 years, experienced something similar. Without warning, her account was said to have been frozen in November 2020. In May 2021, Evans learned that PayPal had withdrawn almost $27,000 from her account. According to her statement, she never found out a reason for this from PayPal and all attempts to contact her failed.
Also read: A payment method you should never use with PayPal
Up to $172,000 in damage to one plaintiff
The damage suffered by the third plaintiff, a Mr. Shbadan Akylbekov, is particularly high. Here PayPal is said to have illegally debited a good 172,000 US dollars.Akylbekov uses a PayPal business account, which he has used to sell hyaluron pens since spring 2020and which goes by his wife’s name. Some customers should joinAkylbekov reported problems with payment. He and his wife found out that PayPal had frozen their account, but they could transfer their money to another account after 180 days. But in August 2020, PayPal withdrew the money itself.
Akylbekov again contacted PayPal to find out where the money went. According to him, the payment service then gave part of the $172,000 as a refund to customersAkylbekov and withheld another part himself – as compensation for the damage that Paypal caused by violating the terms of use on their partAkylbekov were created.
According to his own statement, he never received any proof of the exact transactions or the amount that PayPal itself claimed. Apparently, he only found out the reason for the violation of the rights of use after he had submitted a complaint about PayPal to an official body: the affected account should be usedAkylbekov and his wife have received payment for the sale of hyaluron pens that are not approved by the FDA. PayPal therefore used the money to pay the affected customersto compensate Akylbekov. According to his own statement, he never received any proof of this.
However, it should not have stayed with the debited money. According to the affected users, PayPal also subsequently sent them a tax form – a common practice in the US. The curious thing about this is thatAkylbekov and his wife were only supposed to pay taxes on $162,000. “PayPal seized $172,206.43 while reporting only $162,517.19 to the IRS,” the lawsuit states. The IRS, short for Internal Revenue Service, is the federal tax authority of the United States. Roni Shemtov was also ordered to pay taxes for the sum seized by PayPal.
PayPal is reviewing the lawsuit
At the request of Ars Technica, PayPal informed the portal that the complaint was currently being examined. “We will respond to the allegations through the appropriate legal channels in due course,” said a spokesman.