Forum

Suing Paypal in small claims court to get your funds released
 

Has anyone tried this yet? I know I have made threats to sue before to Paypal empoyees and they have relented from time to time on my accounts. However, it is really lame to have to wait 180 days for some of these limitations.

On what grounds are you going to sue? You did agree to their TOS when you signed up for the account.

180 days is excessive but you will lose to paypal. Common sense tells us 90 days is plenty of time, but TOS gives them 90 more days of interest on your money.

How about the fact that social security is a private number and I am not required to give it out to anyone?

Actually, no where in their user agreement do they state that you are required to give them a social security number. If you don't believe me then read it.

It says the following:

"We may close, suspend, or limit your access to your Account or our Services, and/or limit access to your funds for up to 180 Days if you engage in any Restricted Activities (as further set out in section 9)."

They don't say anything about a social security number being required for identification purposes. They state two things:

"9.1 Restricted Activities. In connection with your use of our website, your Account, or the Services, or in the course of your interactions with PayPal, a User or a third party, you will not:

Refuse to cooperate in an investigation or provide confirmation of your identity or any Information you provide to us"

Providing confirmation of identity can be done in many ways which do NOT require a social security number. If you demand to have your identity confirmed with a driver's license or a similar government issued ID, they should be forced to accept that. Period. Their user agreement merely says that you need to provide proof of your identity.

Section 9 does say the following though:

"Have a credit score from a credit reporting agency that indicates a high level of risk associated with your use of the Services"

This would imply that they would run a credit check on you. They cannot, however, freeze money that you received before they run a credit check on you. That would be a classic example of bait and switch. If they want to run a credit check on you and stop doing business with you, that is fine. However, they have no good cause to hold onto the money you received before they decide to run a credit check on you.

They get away with this because no one fights them. I'm looking into trying to file a small claims suit. Look at it from Paypal's perspective...do they really want to send an attorney to represent them in court or do they want to just give you your $500 or $1000 or whatever is in dispute? Believe me, they won't waste their money. It is money they will eventually have to give you. If more people start slapping them with small claims suits, we might be able to get them to buckle more.

Your original post said nothing about SSN.

When SSN started the government said they would not be used for identification... U.S. citizens wouldn't become numbers. That was in 1936... in 2009, I do not believe paypal has the right to hold funds for a social security number. Contact the attorney general.

Does it not say in their TOS, they can hold your money for 180 days - at their discretion?

**2.3 Identity Authentication. You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your identity. This may include asking you for further information, requiring you to take steps to confirm ownership of your email address or financial instruments, ordering a credit report and verifying your Information against third party databases or through other sources.
This is from their TOS. Because of the OP's mention of problems with paypal in many posts here, the best advice would be to seek legal recourse on the matter.

**Taken from http://paypal.com, the US site. Last amendment was 2/18/2009. paypal has covered themselves well.