Home > News > PayPal Pays for Freezing Accounts • Bookmark   • Newsletters   • Register Search Options

NEWS STORY

PayPal Pays for Freezing Accounts

Get XBIZ News
Aug 2, 2004 11:40 AM PDT    Text size: 
SAN JOSE, Calif. – Payment processor PayPal Inc. has been ordered by a federal judge in the Northern District of California in San Jose to arrange a $9.25 million fund for consumers who allege that the processor randomly froze their accounts between 1999 and January 2004.

Two separate lawsuits were filed in 2002 by Roberta Toher and Jeffrey Resnick claiming that the company was in the habit of restricting, freezing or closing customer accounts without a legitimate reason. The case was then consolidated and turned into a class action suit.

On July 12, the court preliminarily approved the proposed settlement and directed that class members be given notice of the settlement.

In recent years, PayPal has become a popular method for transferring and receiving monies over the Internet.

Per the judge's order, consumers can log onto a "PayPal Litigation Settlement Website" to redeem part of the money they claim was frozen by PayPal.

According to the attorney representing the plaintiffs in the case, consumers who log on to the site will be required to document their experience with PayPal in order to redeem a portion of any related funds.

As part of the judge's ruling, PayPal was required to notify its customer base via email of the new website, although some users claim the mass emailer more closely resembled a solicitation from a spam hoax than a legitimate corporate correspondence.

In the email, PayPal representatives continue to deny any wrongdoing against its more than 45 million consumers.

Recovered funds can range from between $50 to up to $1 million, depending on the experience of the user and whether the complaint is filed via a long form or a short form.

"We believe that based on the information we've been provided that it's a fair settlement," said A. J. De Bartolomeo, an attorney for one of the plaintiffs.

The settlement includes users who feel that PayPal either treated them unfairly or did not respond to their complaints in an efficient manner, De Bartolomeo stated.

By Monday, PayPal was warning users that the settlement website was experiencing delays and other problems due to an extremely high volume of traffic.

The website also states that the deadline to submit an online claim is Oct. 23.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !

LEGAL PERSPECTIVES

Data Privacy Is Tightening Up in the E.U.

Have you begun preparing for GDPR? If you are like most, you haven’t even heard of GDPR, but also if you are like most, it is going to affect your business, starting May 25, 2018. The GDPR, or General... More »

Preventing Legal Problems Before They Start

Dentists typically recommend that a person’s teeth be cleaned every six months and that oral X-rays be taken at least once every year. Internists recommend that a person receive a physical examination... More »

Could Adult Content Be Banned?

Earlier this month, I met with the Free Speech Coalition’s board of directors for our annual review. Despite the headwinds our industry faces, politically and economically, we are, as an organization,... More »
XBIZ NEWSLETTERS
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.






POPULAR PRODUCTS & SERVICES
Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Access the latest issues of the industry's leading trade publications in digital form. View online or download for offline viewing.

UPCOMING EVENTS

EXXXOTICA Chicago

Jun 23 - Jun 25
Chicago, IL.

Latin America Adult Business Expo

Jul 10 - Jul 12
Cartagena, Colombia

ANME Founders Show

Jul 16 - Jul 18
Los Angeles Marriott Burbank Airport

QWEBEC Expo

Aug 03 - Aug 06
Montreal, Quebec
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!