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180-Day Hold Sparks PayPal Suit

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Chicago, ILThere's no way to know how many PayPal users have been frustrated by the online payment service's 180-day lock-down on their accounts, but attorney Julie Miller says there could be "millions of people" with the same complaint. "I've heard from people who have a few dollars locked up and others with thousands in an account they can't access," she says. Miller is representing class members in a nationwide lawsuit charging that PayPal is guilty of consumer fraud, breach of contract and violation of the laws governing the electronic transfer of money.


PayPal, which is owned by eBay and has been in the business of moving money online for more than a decade, has yet to respond to the complaint.

Potential class members include anyone who has had a hold placed on their account anywhere in the US.

The company is less than helpful when PayPal customers ask why the money is being held, says Miller, an attorney with the Chicago firm of Freed & Weiss. "PayPal has not been very good at working with people when there is a hold put on the account. They have a lot of hoops they want people to jump through when people call to find out what's going on.

"Even if they do provide all the information PayPal asks for, they still won't tell them why the account is being held. They tell them to get a court order or a subpoena if they want more information."

The suit is in its early stages and Miller can't say how many PayPal accounts are affected or how much money may be tied up in accounts. "We suspect it the amount is a pretty high number," she says.

The suit seeks to release the money impounded in PayPal accounts and to return it to customers with interest. The suit also aims to force PayPal to end the practice and, if an account is frozen, to force PayPal to provide customers with a reason.

Julie Miller is an attorney with Freed & Weiss in Chicago. She has a BS from Pennsylvania State University and earned her JD at the Indiana University School of Law—Bloomington. Freed & Weiss is a national class action law firm and devotes its practice to plaintiff representation.

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READER COMMENTS

Posted by

on
Last month, I made a small purchase just under $50. Funds went from my credit union, through PayPal to the vendor.
I was granted a refund for a flawed product. It should have / always before has been processed in reverse order.
Paypal then said that my only option to receive it was by applying it to a future purchase.
I made 2 new purchases, just to be denied without a photocopy of my ID, SS card, mail address & bank numbers!!!
I finally researched this shady behavior online, and was blown away [pissed]!
It has not been on any news I've seen, nor mentioned within my sight on Facebook!
I'm grateful that the suit has been started, and you can count me in!

Posted by

on
PAYPAL IS STILL DOING THIS THEY ARE HOLDING $700 DOLLARS FOR NO REASON NOBODY IS GOING TO ASK FOR REFUND I CONTACTED THEM ALL READY

Posted by

on
Got me for $2200

Posted by

on
PayPal put a hold of 7k for 180 at least they say and now is taking 6% of every sale I make and holding it for 90 days!
I have been doing the same business for 15 years 100% positive feed back.
I have a credit line for my business and it charges more than 6.5%
So this can sink my business
My profit margin is like 10%
So I pay interest on the money they hold ! And essentially my income will drop to 3% profit margin over the next 90 days?!
Insane !
They say they don't like my business Model and it's high risk
Well I've done over a million in sales and they made money why are they punishing me for making sales?!

Posted by

on
I had my account limited about 4 days ago. Decided to sell my mac for school fees and just buy cheaper laptop and signed up for paypal and ebay. Not 2 hours after receiving payment after the sale, paypal permanently limited my account with no explanation other than "security issues." When i called in, the rep arrogantly tells me paypal no longer wants my business and i have to find another payment processor. I was confused. Then goes on to tell me they have to hold my funds for 6 months! Thats the part that upsets me. I could care less about paypal thinking im a securoty risk or whatever, but they have no right to hold MY money. Not for 6 months! I can understand a few days after delivery of the item, but paypal wants to give people 6 months to file a claim. It doesnt take that long to open a package and decide you dont want it and ship it back. This practice is very unfair and should be illegal. I want to file a lawsuit just beacuse this practice needs to be ended.

Posted by

on
They have $20,000 of mine on hold because I sell high risk items. PayPal is a awful company and can't believe they are getting away with this.

Posted by

on
hey I called up there to get help withdrawing via check. I got the agent to do it on his end, an hr later it was reversed. I called PayPal and got into an argument with the smartass agent basically telling me to "sleep on it". I could hear the smile on his face the whole time. MY ACCOUNT WAS LIMITED!!!

Posted by

on
Hi I live in the UK and PayPal put a account limit on me, I provided all the documemts they asked for and have now put a hold on my account for 180 days, they say i was too high risk to continue doing business with me! I made some diaries for a dog club 100 to be exact, all conversations were done through email, they were not sold via ebay, the lady that purchased them was goin to pay me by cheque, however 4 wks after i sent the diaries to her she told me that the clibs bank wasnt goingto write any cheques till the new year so she sent the £400 through paypal, she, by mistake sent the money twice so i refunded one of the £400, i purcased some stuff off ebay with the money, then paypal put a hold on my account, i still have no clue as to what terms and conditions i have breach and they refuse to tell me, all they say is they are holding my money for 1800 days in case someone complains about me, yet i havent sold anything on ebay ive only purchased!

Posted by

on
been selling successfully for about 4 months now, a few thousand $$ in revenue.

First time they put my funds on hold were for some expensive items, understandable because i was "new" and my "behavior" had "changed" (eBay buyer for over a decade) - but what irked me then was I had to call and complain because they'd held over $600 for almost a month - the rep acknowledged this was a "glitch" and after I played games with her and her colleagues in "support" the funds were released.

fast forward almost two months later and they are holding my funds again. even two+ weeks after items have delivered.

*NOW* the criteria i must meet: "you have to sell four more items."

i've stopped paying postage in advance because jesus christ that gets expensive especially when i cannot touch funds paid to ME for goods i'm selling. they walk like a bank, talk like a bank, donate to political parties like a bank, but dont get regulated like a bank.

must be a duck?

Posted by

on
Same here I was dropshipping, paypal thinks it's okay because they don't like my business model that they can take my 3500 and hold on to it for 6 months. This is fraud they are using this money to make money. All the while my business is going out of business!!! Let's sue these mother f*ckers!! Class action lawsuit!!!

Posted by

on
PayPal is guilty of consumer fraud, breach of contract and violation of the laws governing the electronic transfer of money. PayPal, which is owned by eBay and has been in the business of moving money online for more than a decade, has yet to respond to the complaint. The company is less than helpful when I ask why the money is being held,PayPal has not been very good at working with people when there is a hold put on the account. They have a lot of hoops they want people to jump through when people call to find out what's going on. Even when I did provide all the information PayPal asks for, they still won't tell them why the account is being held. They told me to get a court order or a subpoena if I want more information." I provided all documents requested and they still denied me. They lied about my documents all being rejected because they limited my account but yet my social card was accepted while my photo ID and passport was denied. How does someone deny two forms of verification? This has significantly hurt my business and even though I have IRS paperwork and a EIN they still denied me. I feel very victimized and it gas cost me over 2,000 in losses the past few days because I am unable to do business. I am very upset with how my case was handled and that a Paypal rep suggested I was a Scammer. He began to explain he has worked in fraud for 10 years and basically insinuated that there is no way I pay customers upfront for their products then resell them to whole sales for a larger payout. (Basically, called me a liar) Its called medical commodities (Diabetic Strips) and a gray market, but perfectly legal. I have many colleagues who work in this business and recommended paypal to me. They do 30k transactions weekly with no problems so I don't appreciate the time, money, and mental stress Paypal has caused me. I became very angry and asked how I am scammer when my customers get paid upfront to avoid any problems when buying products? he tried to retrace his words but I had asked for a supervisor. Ironically, I was hung up on while waiting on hold. I am no stranger to how merchant accounts work and many will agree and back this statement. Well this is how paypal senior shareholders and top executives view the masses that use the service. Don't be under any illusion that the system is automated, decision makers review each complaint and and accounts logistics teams get bonuses for withholding funds.Ultimately, my trust in financial institutions as a result of paypal funds being withheld has become zero to none. This type of behavior demands immediate attention as I am not the only one who has been a victim of false penalization's from paypal.

Posted by

on
PayPal is holding 10k of my money for 180 Days and banned my account because they don't like my business model and I because I grew my business too fast.

Posted by

on
PayPal is holding $11,000.00+ of my money, I do remote network testing. They said I am too successful too fast. I'm a contractor and just started doing this, it makes no sense!

Posted by

on
I'm a reseller, I use dropshipping as my business model. PayPal limited my account and requested ID and invoice. I provided everything that they asked and they closed my account!!
They are now holding over $9000 in my PayPal account! I called them and they said they don't like my dropshipping model!! This is ridiculous! Please help!!

Posted by

on
My money was put on hold for 180 days, i've contacted paypal a few times but I was told there was a dispute transaction, I took care of it, still they won't released my money that is available to me, Please, I need help..

Posted by

on
Paypal wants to hold our money. We can receive but we cannot take out. We have stopped using them but they still won't give us our money. We sell education. All the classes have been taken so there is no reason to hold the money yet they are. We have 0 complaints. So no issues yet they want to hold our money because we do a lot of business. A bank would not do this so how can they?

Posted by

on
PayPal no reasons hold 3500 on the account even though I supplied all the paperwork they requested. Originally said that the hold was customers not receiving the merchandise when I argued it wasn't true and sent prove of that the reason change. Now is already 30 days and now they have a new reason. They said they have to Hold it in case of any returns. I lost my ebay account and now I started all over again.

Posted by

on
Paypal is holding about 4500.00 for 180 days please help.

Posted by

on
Ebay is DEAD as far as I am concerned. Very hard to get a descent price or even a give away sale these days on anything. Had 8 listings not one sale. Paypal put a hold on my funds from a return I did.. So what I did was simply have my credit card company reverse the charge of the original purchase, now I have their funds as they refunded the sale less a hold of $400... they are holding now NOTHING ... now the shoe is on the other foot, give them a taste of their own medicine , see how they like it.
Piss on you Paypal.. hahahahahahahahahahaha

Posted by

on
Paypal put a limit on my account for no reason then when I provided photo ID and a invoice they still said that wasn't enough and I had to wait 180 even through the buyer will received my item I don't see how this is even legal. This person has my 600 dollar phone and I have no money

Posted by

on
I filed a consumer complaint against them. United States Federal Reserve, Washington DC Attorney General, The Better Bureau Business. My account was put on a limit today holding $4300 in it. Im a reseller and I don't send my item until I receive my funds. Cause "some" buyers are not honest. So after three weeks went, my buyers was asking for the item. I called PayPal and complain, after I complain. I received a email two minutes later stating my account was on a hold. I refunded everybody there money. PayPal has ruin my life and my business! That money I use is for me to keep purchasing items and sending items. Ebay just as poor too. They both need to be shut down immediately!

Posted by

on
Paypal has "permanently limited" a seperate paypal account of mine that has ties to my personal paypal account and has my funds on hold. The funds on hold are from funds I sent to a friend and then he chose not to accept them. So after they came out of my bank account, and he did not accept them, paypal has kept the funds for themselves, sounds like theft to me.

Posted by

on
As soon as they hit the billion dollar mark they will file bankruptcy and screw all of us

Posted by

on
Im just open the account of pay pall I have 2 deposit of a total of $6,250 dlls and then they limite my account, my company is decoration of weddings I allready give the service and I pay the cost of these decoration , because when I ask to give to the custumer the money back they said no, that I have to hold 180 days, I dont think that is fair and I hope that is a way to have the money back before, because I have to pay a lot and I work a lot for these money that I dont have
someone can help me

Posted by

on
My account is on a 180 day hold with $4500 in it.. How can i get involved in doing something to stop this nonsense? I will pay to get my money free`d up!

Posted by

on
In a nutshell - Ebay/Paypal put me on a "credit hold" because their new policy says you can't have too many complaints. They look at 6 or 8 different areas. In one area (one that is an anonymous place for buyers to rate you), I was rated "below standard" - in ONE area by POINT 16%. Everywhere else my ratings are WAY above their standards. Ok, so that's not really my issue. My credit hold states that they can hold my funds until 3 days after the customer receives my package (if I ship through PayPal, which I do). Ok, so that's not my issue either. The problem is, after 3 days my funds aren't being released and I have to call them (at least twice a week for the past 6 weeks) to manually release the funds! What a friggin' waste of my time when I'm following all their dumb "policies" and jumping through all their circus hoops. I'm thinking this is not even LEGAL. I need someone who likes to fight for the "little guy" because I don't even know where to start going up against eBay and PayPal!!

Posted by

on
I have been member of paypal and ebay for years i had 35 feedbacks as a buyer when i decided to sell gathering another 35 feedbacks in a month or two. I decided to sell a few items i have then suddenly ebay put limitations to my accounts, asked me id copy, despite they have all my info, bank accounts, ssn. Asked me for receipts of the items i have sold, we are talking about items are between 6 to 30 years old, some of them were new or unused. They considered my account suspicious and without doing anything wrong, no claims, no complaints limited my account and paypal did the same, after i provided the documentation ( i fail to present all the receipts ) before 24 hours i received a message that my account was close and my money $1500 in hold for 180 days. without having claims, without having chrgebacks, without any issue, nor further explanation.

Posted by

on
Dear Attorneys
How can I sign up and give my support on the class action suit against Paypal,, They are unfairly holding funds on me for no reason and I am fed up!! I have a perfect selling record with no bad / "anything" against me,,and today after spending "another" hour of my life on the phone with them complaining ,while they couldn't give me a reasonable answer except for "your not selling enough" I said enough is enough and refunded all the buyer's money ( approx, $600.00) and want to seek legal action!! This is what I wrote to all the buyer's-

-Dear Buyer I wanted to go through with the transaction but Paypal will not release the funds, and I have a perfect selling record!
and if I sell something I expect to get paid before I go through all thetrouble of cleaning/boxing & shipping,, I refuse to use paypal agian until they change their
policy back to what it was when I agreed to use them in the partnership / working agreement
that paypal and I entered into...sorry about your inconvenience .
Tony England

Posted by

on
I had over $1000 on hold for a long time for no reason as they would not give me one. I contacted the law firm here and was placed on the lawsuit. A little while later they did refund my money. I have since closed both my paypal and ebay accounts. Ebay is the culprit even though by law,they are 2 seperate entities. This is not legal in me book.

Posted by

on
i just got my account put on hold. i have been reading a lot online and there are so many people like me. im not gonna be the one to step up and sue them but someone needs to. they either need to become like a bank with all the rules of banks, or just shut down completely. and whatever happens to people with PayPal is usually also happening with PayPal. they are linked and they screw you over from 2 sides. Please Someone just saw them already

Posted by

on
I have had my account put on hold and I have had my acct billed because of so called listing fees. I was billed for the listing fees over and over and I couldnt talk to a Rep about it Thank goodness I only had 54.00 in my pay pal they left me with 9.00. They billed me for listing fees 3 times and the fees became larger each time. I quit using ebay for that reason and when I talk to others I know that use it say the same as I do that ebay needs to be investigated and shut down!!!

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