PayPal faces class action lawsuit over funds freeze

PayPal is one of the world's largest payment processors with hundreds of millions of users. This has been one of the pioneers in digital transactions, as it was one of the first digital wallets to appear.

Every day, millions of dollars are processed through its platform in both commercial and personal transactions. The truth is that this platform has made life easier for many people, however, it has also been a headache for many others.

The abuses that the platform constantly commits by blocking accounts and freezing user funds is no secret to anyone. This is without taking into account transaction fees that can reach up to 5.4% + $0.30 in some countries, mainly in Latin America.

Precisely this has brought problems to the company, which is facing a class action lawsuit in the United States due to the freezing of funds. Some have had their funds frozen, while others have had their account balances withdrawn without explanation.

Of course, this is not something new, but has already been happening within the platform for a long time.

In most cases, the company freezes the funds for up to 6 months. The reasons are not known with certainty, since the company does not provide information on the reason for the closure or freezing.

In the lawsuit, those affected have demanded the restitution of the funds, as well as compensation for the damage caused. This is a federal class action lawsuit filed in California and Chicago.

The affected

In total there have been three lawsuits filed against PayPal Inc. in the U.S. However, those affected are encouraging other people who have also been victims to report the company. That is why it is not ruled out that in the coming days this number may increase.

Among those affected are Shbadan Akylbekov who assured that the company confiscated a sum amounting to 172 thousand dollars. This woman used her account to receive payment from the sale of products online.

One day he was surprised that the company had suspended his account and frozen his funds without further explanation. All they told him was that he had violated the platform's acceptable use rules.

After waiting 6 months to be able to withdraw her money, the woman realized that her account was at zero. The $172,000 was missing, and PayPal's response was that their funds had been seized for "damages arising from violation of acceptable use rules".

Another of the plaintiffs, Roni Shemtov, stated that she was also the victim of a confiscation of $42,000 from her account without any valid explanation. This woman was selling clothes online through eBay and had accumulated that money as a result of her work.

Overnight, he found his account blocked and unable to move the funds for another 180 days. After that time, PayPal confiscated the money from the account without any coherent explanation.

The woman contacted customer service on several occasions, each time obtaining a different and absurd response, such as that her account had been closed for selling clothes at a lower price than the market price.

There may be thousands of cases like these around the world and, as we have already mentioned, PayPal's policy is abusive. In some cases, the company has told those affected that in order to give them information about the reasons for closing the account, a court order is necessary.

PayPal and its policies of use

PayPal has many rules and policies that in some cases may seem excessive. But the company has been abusing it for a long time to seize user funds to compensate for "damages" caused to the platform.

Although it is true that the company in its conditions of use establishes this possibility, as well as the freezing of funds for 180 days, one of the main annoyances is that the company does not offer explanations as to why they have blocked the account.

This is something that can give rise to many doubts, since the user also has the right to know the reasons for that decision. Especially in cases where the company confiscates the balances in the accounts.

In the lawsuit filed, the company has been accused of misappropriation of third party property, civil violations of federal law, breach of contract and even unjust enrichment.

PayPal has not commented on this

So far, the company has not commented or issued a statement in this regard. It is difficult to determine how this lawsuit will end, perhaps PayPal can negotiate with the three plaintiffs and reach an agreement.

However, if more people join the demand, the company may not end well. In any case, for the moment, it only remains to wait to find out how the whole thing ends and what a judge determines.