I'm so happy to see this. I am working on publishing a book on leanpub, and leanpub disburses payments using paypal. Yesterday, I logged into my paypal account and I remembered that this happened to me and my funds and account were frozen since 2010 (something I must have put out of my mind :p).
I was searching for this issue and found this lawsuit and cannot wait to be part of it.
Dealing with Paypal during the time was borderline abusive and I felt helpless every step of the way. In 2010 when they froze my account they mailed me a physical letter with an activation code which took weeks, and when I called to confirm my account I was told that the code was incorrect...
I had very very little money in my account < $100 and I can't imagine how frustrating it would be for someone who needed paypal for their income.
I'm happy to be in a position where I can choose to never use paypal again and I hope they are punished for the way they treat their customers.
Don't worry.
You won't have that money after they've implemented the inactivity fee last year: https://www.paypal.com/be/smarthelp/article/what-is-the-inac...
Wow. Notably receiving money does not make the account active.
Notifications to inactive accounts begins 15 November 2021 and advise simple actions to take before 15 December 2021 to avoid the fee:
- Log-in to your account; or
- Shop wherever PayPal is accepted; or
- Send money to friends & family, or vendors for goods & services; or
- Withdraw money from your account; or
- Donate to a charity with your account
I chose the option to close my account.
Good to know. I just transferred out my PayPal balance.
> Accounts with zero balance wonât be impacted and this charge wonât result in any negative balance.
How gracious.
Yeah, very nice of them.
Inactivity fee is such a disgusting practice. It doesn't cost them anything to keep the account.
It's an attempt to legalize theft.
That's not strictly true. It doesn't cost them _much_ but holding and tracking other people's money has a cost.
That said, I think the better answer is to send it to the state as unclaimed property.
How ironic.
When I was canceling my paypal account a few years ago, paypal prompted me: It's free to have a paypal account, so if you don't want to use it, just leave it.
It's hard for me to imagine when someone opens his old PayPal account and finds out that he was charged 10 âŹ. (not even in US dollars)
For over a decade I've heard tons of stories about PayPal freezing accounts for questionable reasons. I've heard of events that were cancelled because the organizers suddenly couldn't access the money people paid to the event, and PayPal wouldn't release the money until they could prove they'd organized the event for which people paid, for which the organizers of course needed that money.
I will never ever use PayPal. Everything I've heard about them makes them sound like an extremely unreliable payment provider.They're not an organization you should trust with your money.
They even created this website, back in the old days:
Worth mentioning in this context is this page:
> leanpub disburses payments using paypal
generally speaking, is it more complicated for these kinds of payments to be done via wire/swift/etc versus paypal?
Wire transfers have borderline predatory fees unless you're moving thousands of dollars, and there's still the issue of "oh you entered one of the numbers incorrectly, hopefully they give you your money back!"
This is a distinctively US feature. SEPA transfers cost (next to) nothing, and the IBAN has a checksum, so entering a single digit wrong will get the transaction rejected.
I wonder how Wise (formerly TransferWise) accomplishes this.
They seem to be able to send money to bank accounts anywhere for extremely reasonable prices.
Try shopping banks. My wires are free in most cases and I am not a big customer or anything.
I've used Zelle and it was easy. My bank is suggesting them (they have first class support), but I have no idea if they are otherwise better/worse than paypal. Most of the time if I owe money it is either credit card or I used my bank's bill pay (which sends a physical check if they don't have an electronic arrangement)
I did a wire transfer once, $15 in fees, but since the amount was from a house sale (to get from the bank where the money was deposited to my mortgage bank - they couldn't do this direct which was annoying). I wouldn't do it for normal things, but with that much money involved I don't blame the banks for some friction and the cost wasn't much. Hopefully I never do one again, and also I hope I'm an oddity for even doing it at all.
Zelle is window dressing on top of ACH.
They frozen my account at Christmas. How do I get in Involved with this
> Lena Evans, one of the plaintiffs who'd been a PayPal user for 22 years, said the website seized $26,984 from her account six months after it got frozen without ever telling her why.
Wait, what? They're actually taking the money? I thought the article was just being careless with the terms "frozen" and "seized".
On what power are they doing so? It's understandable when the relevant authorities (be it a tax authority, or a financial supervisory authority, or a court, or whatever) seize money, but they are not an authority.
Furthermore, if the money in question actually were illicit, then by what fantasy argument would they be allowed to keep it themselves rather than having to hand it over to the goverment? The entire point is that the money is dirty and nobody may keep it.
See my comment below: they just seized (not frozen, seized) 50k EU from us in a targetted attack against our company and shareholders because we took legal counsel when they froze the accounts.
At the risk of arm-chairing this too much: did you contact the CSSF, who seems to be the supervisory authority responsible for AML enforcement in Luxembourg?
To highlight how insane this sounds: let's assume, for the sake of argument, that your 50K is suspected to be cocaine money. There exist exactly two outcomes: either you are exonerated and you get your money back, or you're eventually found guilty of something, and the government takes the money.
But Paypal? They have zero claim to the money, and they could be in hot water even for merely holding on to it.
But to seize it? There is just no way that any bank involved in AML enforcement can keep funds for themselves, and any supervisory authority who's handed evidence to such a practice would tear them apart.
I definitely appreciate the arm-chair assistance: I'm unfamiliar with the Luxembourg jurisdiction, so your pointers are great - we will discuss with our lawyers.
From what I understood, Luxembourg's consumer laws are more loosely defined than that of other EU jurisdictions - which makes the type of T&C that PP has established easier to maintain.
They could plausibly return it to the people who paid it in, if their excuse is that it's believed to be fraudulent. Six months of float is enough to make a significant amount of money, too, especially if it's in an inflating currency (like the dollar over the last year).
Good. I love when companies are so big they do as they please and retaliate when brought to task.
Hopefully it's one more nail in their coffin.
All the best, hope this is the beginning of their end.
PayPals parent company, Ebay, is not exactly innocent either.
> Federal prosecutors have said the harassment included anonymous deliveries of items like live insects, a funeral wreath, and a bloody pig face Halloween mask to the couple's home. The employees also sent pornographic magazines with the husbandâs name on it to their neighborâs house and planned to break into the coupleâs garage to install a GPS device on their car.
https://abcnews.go.com/Business/wireStory/couple-ebay-harass...
the only way this stuff will change is if the fines are SUBSTANTIAL
On what power? âWe are big and have money. You are small and have no moneyâ.
This has been a reliable source of power for at least a century
I meant on what official authority.
I understand what you meant to say, but realize that this is like some random bully stopping cars on the highway and issuing speeding tickets. Victims might play along for a while, but when actual law enforcement shows up, the bully is going to have a very bad time.
> this is like some random bully stopping cars on the highway and issuing speeding tickets
LOL, I've paid that exact "fine", the "bullies" were official, uniformed Mexican police. They were literally just flagging everyone on vacation at a specific resort, along the only road from that resort into town (with a big chain across the road to collect everyone) and taking $200 to be allowed to continue on. Nice work if you can get it I guess.
I've also paid bribes to bullies in Yugoslavia ("people with machine guns standing in the road") in order to pass by. I don't think they were official though.
Longer than that.
Per the article, Paypal is seizing the money as damages:
> 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.
Indeed, this is an important point that I missed. So if I get this right, this isn't about actually AML activity, but a civil claim under something like ToS.
So I looked up the AUP, and indeed: they claim $2,500(!) liquidated damages per violation of the AUP, which is on average a ridiculously high amount. Selling 10 individual bottles of wine without approval will incur $25,000 damages under this scheme.
Given these terms, you have to be absolutely nuts to sign any agreement with Paypal.
> if the money in question actually were illicit, then by what fantasy argument would they be allowed to keep it themselves rather than having to hand it over to the goverment? The entire point is that the money is dirty and nobody may keep it.
I don't know what fantasy they operate under, but back in the 2010s I observed Google doing this numerous times with "seized" click fraud revenue -- one of my sites was a victim of a click fraud attack as an attempt to get my AdSense account banned, and my friend's site at the time was advertising on my domain via AdWords and he didn't see any kind of refund despite the $800 that was taken from me (which was the entirety of my revenue for that month). Google just keeps funds they seize I'm pretty sure, or at least they did back then.
Link to actual lawsuit: https://aupdamages.com/wp-content/uploads/2022/01/PayPal_Fil...
(I had to Google this and find it in a Reddit thread, so it's not directly from the court's website. If anyone can find that it'd help)
It took a bit to find it because PACER's search is awful. Plus you have to PAY for every search.
I bought all the current docket entries and added them to RECAP so you can download them for free:
https://www.courtlistener.com/docket/62596200/evans-v-paypal...
EDIT: From PayPal's AUP in the Complaint.. yowch! "You acknowledge and agree that $2,500.00 U.S. dollars per violation of the Acceptable Use Policy is presently a reasonable minimum estimate of PayPalâs actual damages - including, but not limited to, internal administrative costs incurred by PayPal to monitor and track violations, damage to PayPalâs brand and reputation, and penalties imposed upon PayPal by its business partners resulting from a userâs violation - considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated because, due to the nature of the violations of the Acceptable Use Policy, actual damages would be impractical or extremely difficult to calculate. PayPal may deduct such damages directly from any existing balance in any PayPal account you control."
You don't generally actually pay for PACER unless you are using it at a professional volume.
I've never actually paid for PACER. They waive the fees if you're below $X every quarter. And it's a generous enough $X.
The problem is that usually anti-money laundering laws give the operator and the compliance officer an infinite protection even on a suspected money laundering. As long as the compliance process is followed, no matter how stupid the process is, there is no legal basis to go after account freezer and the company is protected. Thus, the company has no incentive to be reasonable with account freezes.
PayPal has worked hard to not be a âbankâ so they are long overdue for being sued about this. I know countless vendors who have had their funds stolen.
It's really and outrageous that this open stealing of customers' hard-earned cash for minor perceived user agreement violations is so freaking rampant, with PayPal. I wouldn't be surprised if it turned out that this literally was a strategy cooked up by the higher-ups at PayPal to buff up the company's gross profits.
I was thinking of that too. Itâs gotta be quite profitable for them.
Itâs probably one of those things which is never explicitly written down. Like, the CEO says âwe have to double down on our âfraudâ account seizuresâ and they smile when they say âfraudâ.
Or simply those that understand and play along get promoted and those that start asking questions are pushed out due to ârestructuringâ.
Freezing the account or booting the user from the service is one thing, but seizing the money as a result without any due process seems pretty messed up IMO
AML/KYC laws are a travesty to a free society. Wealth transfer shouldn't be illegal. Prosecute the underlying crimes and let the judicial process seize proceeds of crime after due process. In the meantime, various electronic systems continue to provide adequate avenues for those seeking minimized exposure to KYC/AML.
On top of all that (with which I fully agree), it's not even effective, in any plausible sense of that word.
If this analysis[1] is to be believed, AML laws recover less than 1% of estimated laundered funds, at an explicit cost at least an order of magnitude higher than what is actually recovered.
That's not even including the implicit costs, e.g. when innocent people get caught up and lose their accounts or even their funds.
Travesty doesn't even begin to cover it.
[1] https://www.ledgerinsights.com/anti-money-laundering-has-les...
> an explicit cost at least an order of magnitude higher than what is actually recovered.
The goal is not to make money with AML laws, but to deter and prosecute crime (which has huge externalities itself). Is it effective at that? Your comment doesn't address that.
> Prosecute the underlying crimes and let the judicial process seize proceeds of crime after due process.
At least a basic identity check (that's the "KYC" part) must be part of bank account onboarding for that to work though. Otherwise, how would a government be able to seize the bank account of a convicted criminal if they had no way to tie the bank account to a criminal?
As for the anti money laundering regulations: these are a very fine line to balance. Personally, I'd like for these to go away the earlier the better since I agree with you that the potential for dragnet-style abuse is way too high, but on the other hand, terrorism financing is a present and clear danger worldwide.
I'm supposed to give up my anonymity because of an entirely different person's crime? No thanks, I'm not a criminal. I'll keep using monero or whatever other systems limit my exposure to these unreasonable search without probable cause/warrant of my identity. I believe KYC is violation of 4th amendment, and that the government's ability to seize proceeds of crime is a lower priority than civil rights.
AML/KYC is just the financial version of global mass surveillance. They're bad for society and freedom for exactly the same reasons. I truly hope that some cryptocurrency like Monero will succeed.
ZKs, bulletproofs etc are going to be working their way into btc and eth in the next year or two and i would expect to be ported to competitors. it will be impossible to prevent strong anonymity in transactions on any of the major chains in short order. even LND offers very good privacy advantages.
KYC laws are a tragedy that perpetuate the unranked I the digital age. without an ID you don't exist to the global financial system. Nevermind that some countries are too poor or lack the infrastructure to provide all of their citizens with IDs. Not to mention poor citizens in wealthy countries who don't have ID.
Am at paypal this is every year in compliance videos, there must be terrible and inept bureaucracy - not sure what is that side of the story. but i can see them no wanting to invite ire of regulatory punishments. go to small claims court if its a small sum. you should not keep large sums at any online outfit, paypal, coinbase or others. Even bank account is a suspect space, better stow money in money market funds for quick liquidity, its super easy to defraud it.
Very good news, especially the potential class action.
Something that I find very interesting is how the individual lawsuits will end. I remember (but can't find) a David vs Goliath case from some time ago, where a user brought Google to the small claims court. He won the case in that venue, but subsequently lost when Google followed up an brought a huge amount of documentation and won. The guy's conclusion was that Google knows _a lot_ of stuff and can leverage it; I think that the events could play similarly, here.
Recently I've been suspended from an "online bank". It's a traumatic experience, especially if you need the money held in that account.
Fortunately the amount I had there was not that big but the abusive procedure is trumatic. I can't imagine how someone would feel like to have all his rent money blocked in an online bank.
Basically you are told that unless you provide whatever documentation they want you loose the access to your own funds. Of course providing them documentation is no guarantee they will lift the restrictions. The support is via email only. The boarding and verification process it's really just a bite and switch scheme. I don't know how someone would feel safe to keep money in such a bank after they put your account/transactions on hold for days.
I start to like the "crypto currency" concept of owning your money more and more.
Your "online bank" does not sound like an actual bank (much like PayPal isn't one).
Revolut, Monese and others claim to be online banks...can't tell you exactly what makes an "online bank" an "actual bank" but they provide you individual bank accounts (unlike paypal).
I'm surprised they don't do KYC before taking your money. You always have to sit through that first with brick and mortar banks...
In Revolut's case it's the banking license that makes them an "actual bank".
send photos of your passport etc and and append a form filled out saying that you are filing a complaint with FDIC, they wake up real quick, fines are substantial there.
When I worked at PayPal, some of the execs would say "we don't make money by giving it back to people". These were the execs that worked directly with Theil and Musk and I'm sure they're long gone, but it was definitely Theil and Musk who pushed for these types of policies right from the start (well Musk agreed when he showed up, he wasn't a founder of PayPal despite what he wants you to believe).
Well there it is, Netcraft confirmed it.
I've been battling dumb Paypal problems both on the end user and the merchant side so often that I'll never again use it if at all possible, especially in shops. It's just not worth the time and effort to try and trick them into doing their job.
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