Paypal Policy Update Says You Can't Sue Them

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Paypal Policy Update Says You Can't Sue Them as a Plaintiff or part of a Class Action. What options does that leave you?

PayPal recently posted a new Policy Update which includes changes to the PayPal User Agreement. The update to the User Agreement is effective November 1, 2012 and contains several changes, including changes that affect how claims you and PayPal have against each other are resolved. You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis.
#paypal #policy #sue #update
  • Profile picture of the author Rus Sells
    Their Terms of Service do not supersede law. That's just a smoke screen if you ask me to deter people who don't know their rights from exercising them.

    That's what I think.
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    • Profile picture of the author CBusiness
      Originally Posted by Rus Sells View Post

      Their Terms of Service do not supersede law. That's just a smoke screen if you ask me to deter people who don't know their rights from exercising them.

      That's what I think.
      'That's what I would hope but I am waiting on response
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    • Profile picture of the author WeavingThoughts
      Originally Posted by Rus Sells View Post

      Their Terms of Service do not supersede law. That's just a smoke screen if you ask me to deter people who don't know their rights from exercising them.

      That's what I think.
      This.

      1. Already a thread about this.

      2. Paypal's new TOS is illegal in the states.
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    • Profile picture of the author impro42
      Originally Posted by Rus Sells View Post

      Their Terms of Service do not supersede law. That's just a smoke screen if you ask me to deter people who don't know their rights from exercising them.

      That's what I think.
      Exactly. You can't say people can't sue you just because it is in your terms. That is ridiculous.
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    • Profile picture of the author UpNorthGuy
      Bwhahaha. They're full of crap. "You can't sue me because I say so." Funny
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      • Profile picture of the author BrianMcLeod
        Originally Posted by UpNorthGuy View Post

        Bwhahaha. They're full of crap. "You can't sue me because I say so." Funny
        Actually, it's "you can't sue me because YOU said so..."

        That's what the arbitration clause IS.

        To wit:

        14.3 Agreement to Arbitrate. You and PayPal each agree that any and all disputes or claims that have arisen or may arise between you and PayPal shall be resolved exclusively through final and binding arbitration, rather than in court, except that you may assert claims in small claims court, if your claims qualify. The Federal Arbitration Act governs the interpretation and enforcement of this Agreement to Arbitrate.

        Prohibition of Class and Representative Actions and Non-Individualized Relief.

        YOU AND PAYPAL AGREE THAT EACH OF US MAY BRING CLAIMS AGAINST THE OTHER ONLY ON AN INDIVIDUAL BASIS AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE ACTION OR PROCEEDING. UNLESS BOTH YOU AND PAYPAL AGREE OTHERWISE, THE ARBITRATOR MAY NOT CONSOLIDATE OR JOIN MORE THAN ONE PERSON'S OR PARTY'S CLAIMS AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A CONSOLIDATED, REPRESENTATIVE, OR CLASS PROCEEDING. ALSO, THE ARBITRATOR MAY AWARD RELIEF (INCLUDING MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF) ONLY IN FAVOR OF THE INDIVIDUAL PARTY SEEKING RELIEF AND ONLY TO THE EXTENT NECESSARY TO PROVIDE RELIEF NECESSITATED BY THAT PARTY'S INDIVIDUAL CLAIM(S). ANY RELIEF AWARDED CANNOT AFFECT OTHER PAYPAL USERS.
        Arbitration Procedures.

        Arbitration is more informal than a lawsuit in court. Arbitration uses a neutral arbitrator instead of a judge or jury, and court review of an arbitration award is very limited. However, an arbitrator can award the same damages and relief on an individual basis that a court can award to an individual. An arbitrator also must follow the terms of this User Agreement as a court would.

        The arbitration will be conducted by the American Arbitration Association ("AAA") under its rules and procedures, including the AAA's Supplementary Procedures for Consumer-Related Disputes (as applicable), as modified by this Agreement to Arbitrate. The AAA's rules are available at www.adr.org. A form for initiating arbitration proceedings is available on the AAA's website at http://www.adr.org.

        The arbitration shall be held in the county in which you reside or at another mutually agreed location. If the value of the relief sought is $10,000 or less, you or PayPal may elect to have the arbitration conducted by telephone or based solely on written submissions, which election shall be binding on you and PayPal subject to the arbitrator's discretion to require an in-person hearing, if the circumstances warrant. Attendance at an in-person hearing may be made by telephone by you and/or PayPal, unless the arbitrator requires otherwise.

        The arbitrator will decide the substance of all claims in accordance with the laws of the State of Delaware, including recognized principles of equity, and will honor all claims of privilege recognized by law. The arbitrator shall not be bound by rulings in prior arbitrations involving different PayPal users, but is bound by rulings in prior arbitrations involving the same PayPal user to the extent required by applicable law. The arbitrator's award shall be final and binding, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
        Costs of Arbitration.

        Payment of all filing, administration, and arbitrator fees will be governed by the AAA's rules, unless otherwise stated in this Agreement to Arbitrate. If the value of the relief sought is $10,000 or less, at your request, PayPal will pay all filling, administration, and arbitrator fees associated with the arbitration. Any request for payment of fees by PayPal should be submitted by mail to the AAA along with your Demand for Arbitration and PayPal will make arrangements to pay all necessary fees directly to the AAA. If the value of the relief sought is more than $10,000 and you are able to demonstrate that the costs of arbitration will be prohibitive as compared to the costs of litigation, PayPal will pay as much of the filing, administration, and arbitrator fees as the arbitrator deems necessary to prevent the arbitration from being cost-prohibitive. In the event the arbitrator determines the claim(s) you assert in the arbitration to be frivolous, you agree to reimburse PayPal for all fees associated with the arbitration paid by PayPal on your behalf that you otherwise would be obligated to pay under the AAA's rules.
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  • Profile picture of the author Ncosti
    If it is a take-the-money-and-run type situation I can see how you couldn't sue Paypal, I remember I had a dispute with them and they claimed that their money comes from the Federal Reserve and there are no refunds whatsoever unless it's specified in the transaction agreement. The best thing to do in such a situation is to call your bank and if it's a large bank they will threaten legal action to request a refund of the funds or in most cases if it's a low sum just refund you the money, I've had that happen a few times. Don't worry about it too much.
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  • Profile picture of the author Mr. Ken Russell
    Hahahaha wow. That's awesome. I'm going to add that in my disclaimer too. Being above the law is great.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Rus Sells View Post

      Their Terms of Service do not supersede law. That's just a smoke screen if you ask me to deter people who don't know their rights from exercising them.

      That's what I think.
      Hey, Rus... Where did you say you went to law school again?

      Dispute resolution is mentioned in just about every site license and TOS I've ever read. In PP's case, the terms of service become part of the contract you have with them for opening/maintaining an account.

      I haven't been to law school, either, but I have had this pointed out to me by people who have and make a good living pointing things like this out to people like me...
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Nio93 View Post

      Hahahaha wow. That's awesome. I'm going to add that in my disclaimer too. Being above the law is great.
      It's not being above the law. It's working within the law.
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  • Profile picture of the author Josh Anderson
    Originally Posted by CBusiness View Post

    Paypal Policy Update Says You Can't Sue Them as a Plaintiff or part of a Class Action. What options does that leave you?[/U][/B]
    Arbitration as the contract mentions.

    Now you know why PayPal is investing in building an offshore floating island nation in international waters.
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    • Profile picture of the author kindsvater
      The Supreme Court held this is legal per controlling federal law, and effectively overruled numerous states, such as California, which had found this was abusive and unenforceable. That is why you see so many similar arbitration clauses popping up in contracts everywhere. It is a 'get out of jail free card' for big business.

      The response by many consumers was to file petty arbitration claims against businesses, forcing them to pay thousands of dollars for each arbitration. Arbitration being free for the consumer but costing the business thousands of dollars is a good way to exact revenge.

      The response response is why you now see terms allowing an arbitrator to require the consumer to be liable for the arbitrator's fees if their claim is ruled frivolous.

      I believe PayPal is subject to a court order per a settlement of a class action not to require arbitration of claims, so it will be interesting to see what happens.

      .
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      • Profile picture of the author new2im
        Originally Posted by kindsvater View Post

        The Supreme Court held this is legal per controlling federal law, and effectively overruled numerous states, such as California, which had found this was abusive and unenforceable. That is why you see so many similar arbitration clauses popping up in contracts everywhere. It is a 'get out of jail free card' for big business.

        The response by many consumers was to file petty arbitration claims against businesses, forcing them to pay thousands of dollars for each arbitration. Arbitration being free for the consumer but costing the business thousands of dollars is a good way to exact revenge.

        The response response is why you now see terms allowing an arbitrator to require the consumer to be liable for the arbitrator's fees if their claim is ruled frivolous.

        I believe PayPal is subject to a court order per a settlement of a class action not to require arbitration of claims, so it will be interesting to see what happens.

        .
        I might just be dumb... but could you say this in more laymens terms?

        I don't quit get what you mean, thanks
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    • Profile picture of the author CBusiness
      Originally Posted by Josh Anderson View Post

      Arbitration as the contract mentions.

      Now you know why PayPal is investing in building an offshore floating island nation in international waters.

      I thought you were joking and then i read this. AMAZING
      Paypal founder invests in floating island utopia - Telegraph
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      • Profile picture of the author Steve Wells
        Originally Posted by CBusiness View Post

        I thought you were joking and then i read this. AMAZING
        Paypal founder invests in floating island utopia - Telegraph
        Sounds like "Water World" with Kevin Costner to me.

        Why not just do this on the moon, no one government lays claim or solely governs the moon right now...
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      • Profile picture of the author ChiBusinessman
        Originally Posted by CBusiness View Post

        I thought you were joking and then i read this. AMAZING
        [Paypal-founder-invests-in-floating-island-utopia.html]Paypal founder invests in floating island utopia - Telegraph[/url]

        What are you serious? I thought it was just a joke! wth! The audacity that some big corporations have jeez. I remember reading about the owner who actually builds the small floating islands for the wealthy & he said in an interview that 1 of their major concerns is building a floating island to withstand big waves.....lol who knows it may take some time for PP to have their friggin island & for the 99% to raise the funds enough to play "battleship" with them to sink it....lol if you end up researching and finding that there is such a movement please lol feel free to contact me....I'll donate a dollar to that cause by money order not by PP its bad enough they double dip each time I make an ebay sale...lmao.
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    • Profile picture of the author vivo
      Originally Posted by Josh Anderson View Post

      Arbitration as the contract mentions.

      Now you know why PayPal is investing in building an offshore floating island nation in international waters.
      Lol. I wonder if Halliburton is going to join them? Heck, maybe I'll join them. 1,500 a month is not half bad for waterfront property a month in a financial district
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  • Profile picture of the author Joseph Robinson
    Banned
    For those who want to opt out (it's been said more than once that the method "isn't mentioned anywhere"):


    You can choose to reject this Agreement to Arbitrate ("opt out") by mailing us a written opt-out notice ("Opt-Out Notice"). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131. The Opt-Out Notice must state that you do not agree to this Agreement to Arbitrate and must include your name, address, phone number, and the email address(es) used to log in to the PayPal account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of the User Agreement, including all other provisions of Section 14 (Disputes with PayPal), will continue to apply. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.
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  • Profile picture of the author onegoodman
    Nice TOS. I need to go and add that to my website TOS as well.
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  • Profile picture of the author Jay Brass
    Well hey, if PayPal can do state that they're untouchable by their TOS, I might as well include this on my sites as well.

    It's amazing how dumb people are today.
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  • Profile picture of the author shane_k
    @Joseph Robinson

    So does this mean if you decide to opt-out that you can still use paypal?

    Because in another thread, someone was saying that if you opt-out that you wouldn't be able to.

    But looking at what you posted it seems that you could still use them.
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    • Profile picture of the author Joseph Robinson
      Banned
      Originally Posted by shane_k View Post

      @Joseph Robinson

      So does this mean if you decide to opt-out that you can still use paypal?

      Because in another thread, someone was saying that if you opt-out that you wouldn't be able to.

      But looking at what you posted it seems that you could still use them.
      That quote is from section 14.3, heading C of Paypal's policy updates page, so unless PayPal is lying on its own website you can opt out and still use PayPal. Whoever said otherwise just enjoys bashing PayPal and/or didn't actually read everything.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by shane_k View Post

      @Joseph Robinson

      So does this mean if you decide to opt-out that you can still use paypal?

      Because in another thread, someone was saying that if you opt-out that you wouldn't be able to.

      But looking at what you posted it seems that you could still use them.
      Some people are horribly misinformed and/or borderline illiterate.

      The only consequence I can see from opting out is the inability to join any class action suit. It says that by opting out you agree to seek any possible damages individually.
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      • Profile picture of the author onSubie
        Originally Posted by JohnMcCabe View Post

        Some people are horribly misinformed and/or borderline illiterate.

        The only consequence I can see from opting out is the inability to join any class action suit. It says that by opting out you agree to seek any possible damages individually.

        There was a recent case of a woman who opted out of the class action suit against a car manufacturer (Honda) for overestimating gas mileage in promotional material. She sued on her own in small claims court and successfully won a couple of thousand dollars ($9,867).

        The members of the class are being offered something like $50 ($100 + $1000 towards a new Honda) in the settlement.

        Mahlon
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  • Profile picture of the author Linkology
    Originally Posted by CBusiness View Post

    Paypal Policy Update Says You Can't Sue Them as a Plaintiff or part of a Class Action. What options does that leave you?
    It leaves you the option to use a different Payment Processor.
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  • Profile picture of the author fghaegele
    Ahahaha!!- that is so paypal.
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  • Profile picture of the author CBusiness
    lets be honest here.

    nobody can confirm Paypal's intent with this but on the flip side............... WHAT DOES YOUR INTUITION tell you Paypal will do with this?

    Dont be too smart for yourself in matters like this. You end up angry screaming "Paypal sucks"
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  • Profile picture of the author BrianMcLeod
    Bumping this discussion as it's timely - Nov. 1st the update goes into effect.

    Concerned about account being viewed with a jaundiced eye if you don't accept new terms.

    Concerned about being stuck with binding arbitration as only legal relief if you do accept.

    Diabolically catch-22.

    Brian
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  • Profile picture of the author Bellerine
    I'm confused and more than a little worried about this.

    Last I knew the Federal Court in Case C-02-1227 JF (Pvt) in 2002 said the following with respect to the User Agreement:
    "Having considered the terms of the User Agreement generally and the arbitration clause in particular, as well as the totality of the circumstances, the Court concludes that the User Agreement and arbitration clause are substantively unconscionable under California law and that arbitration cannot be compelled herein."

    Am I to understand this has been overruled?
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    • Profile picture of the author Rob Howard
      Originally Posted by Bellerine View Post


      Am I to understand this has been overruled?
      That's basically what Brian said - Supreme court says their TOS is legal, in simple terms.

      Actually, here is his layman terms for it:

      Originally Posted by kindsvater View Post

      The dudes in the black robes in Washington said PayPal can screw you over.

      .
      Rob
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  • Profile picture of the author icoachu
    Looks like a standard arbitration clause. It limits their legal fees and damages. Arb clauses are pretty standard in all sorts of contracts.
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  • Profile picture of the author Faisal66
    PayPal tends to make soo many changes...

    And we could even expect a lot more....

    Is it time to find an alternative...?
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    • Profile picture of the author Tina Golden
      It doesn't say you can't sue. It says you can't sue as part of a class action or group legal action; you must sue as an individual.

      Whether this is a legally binding TOS, I don't know, but it's not forbidding lawsuits.
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  • Profile picture of the author impro42
    It's good to read the fine print though. Fbook changed theirs after people realized they were saying that they owned everything you uploaded after you uploaded it
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  • Profile picture of the author Walter Parrish
    Originally Posted by CBusiness View Post

    Paypal Policy Update Says You Can't Sue Them as a Plaintiff or part of a Class Action. What options does that leave you?

    PayPal recently posted a new Policy Update which includes changes to the PayPal User Agreement. The update to the User Agreement is effective November 1, 2012 and contains several changes, including changes that affect how claims you and PayPal have against each other are resolved. You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis.
    I'm no lawyer, but it seems as if they want to prevent class action. You can still sue on an individual basis.
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  • Profile picture of the author Vitus
    You can always go through the Better Business Bureau or the equivalent in your country, which create an "executive dispute". They are more compliant then.

    The actually handle things then that are usually not within the TOS.
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  • Profile picture of the author stevejones003
    They are just adding a layer of defense though they know it has very low chance of standing strong in a court of law.
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  • Profile picture of the author jaypyoung
    It's been known for a long time that PP have been Judge , Jury and Executioner. This change of TOS just confirms that. But they will still be my main online processor.
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  • Profile picture of the author seasoned
    Do you guys have ANY idea how many people will sue paypal for tings they have NOTHING to do with? Maybe they all have ALZHEIMERS! A person with that affiliction may demand that your mailperson trim the hedges because they look too rough.

    Anyway, a person may buy a kit and a year later want to sue paypal because it wasn't quite as advertised.

    And look at contracts some time. Working with software as I do, I have looked at some software contracts and they even say that the software may fail to be anything close to what people may expect and they are to be held blameless. It HAS gone to court, and they determined that if a person can read it before the sale, it is LEGAL.

    Steve
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  • Profile picture of the author jia
    is there anyone can suggest of a better alternative?
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  • Profile picture of the author davezan
    Just a friendly bump to remind some folks about this policy update, and to take time to fully
    read and understand this (including this discussion, maybe) if they haven't yet.
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    David

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