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PayPal Settles Class Action Lawsuit
ephidryn writes "I just received a notice from paypal which indicates that I may be involved in a class action lawsuit against paypal. Apparently two PayPal users, Roberta Toher and Jeffrey Resnick, filed two seperate lawsuits that were later combined into one class action suit. ZDNet has a story that notes: "PayPal said it would pay a total of $9.25 million to settle the federal class-action suit..."
I'm so ready to receive my check for $0.35US" kai5263499 adds "The settlement states that anyone who opened an account between Oct 1, 1999 and Jan 1, 2004 is elegible to participate in the settlement. According to their Plan of Allocation you can fill out a short form or a long form to sign up."
The ZDNet story they link in the article is actually for eBay's problem with double charging fees, but mentions the PayPal situation near the end...
THIS is the actual PayPal story (from 6/14/04), which is referenced at the bottom of the eBay one linked in the article.
Dear [Your Name],
IF YOU OPENED A PAYPAL ACCOUNT BETWEEN OCTOBER 1999 AND JANUARY 2004, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.
PLEASE READ THIS NOTICE CAREFULLY.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
In re PayPal litigation
Case No. CV-02-01227-JF (PVT)
NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT
1. WHY DID I GET THIS NOTICE?
You have been sent this Notice because the records of PayPal, Inc. indicate you are a current or former PayPal account holder. This means you may be eligible to receive a payment from the proposed class action settlement in the lawsuit In re PayPal Litigation, Case No. 02 1227 JF PVT, pending in the United States District Court for the Northern District of California in San Jose. This Notice provides a summary of the terms of the proposed settlement. It also explains the lawsuit, your legal rights under the settlement, what benefits are available to you under the settlement, and how to get them.
2. WHAT IS A CLASS ACTION?
In a class action, one or more people, called Class Representatives (in this case Roberta Toher and Jeffrey Resnick), sue on behalf of people who have similar claims. All of these people are members of the Class. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. United States District Judge Jeremy Fogel is in charge of this class action.
3. WHAT IS THIS LAWSUIT ABOUT?
In early 2002, Plaintiffs Roberta Toher and Jeffrey Resnick filed separate lawsuits against PayPal, Inc. These two cases were later consolidated into one lawsuit in the United States District Court for the Northern District of California, San Jose Division, entitled In re PayPal Litigation, Case No. CV 02 01227-JF (PVT). The lawsuit alleges that PayPal violated the federal Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. 1693 et seq., including provisions requiring PayPal to supply customers with information about dispute resolution procedures and to follow certain procedures when investigating complaints of unauthorized or incorrect electronic fund transfers. For example, the lawsuit claims that PayPal did not provide account statements in the manner required by the EFTA. The lawsuit further alleges that PayPal has placed inappropriate restrictions or other limits on customers' accounts and engaged in other improper practices. Based on these practices, the lawsuit asserts claims under California state law for conversion, money had and received, negligence, and violations of consumer protection statutes.
PayPal does not believe that it did anything wrong. In fact, PayPal disputes that the EFTA, originally passed in 1978, applies to its business. PayPal denies any and all liability for the claims alleged in the lawsuit. The Court did not decide in favor of the Plaintiffs or PayPal. Instead, beginning in the fall of 2003, the parties began a series of settlement negotiation sessions mediated by United States Magistrate Judge Edward Infante. Eventually, in November 2003, both sides agreed to a settlement in principle. By settling their claims, both parties avoided the uncertainty and cost of a trial. The settlement provides money and other benefits to the Class. On June 11, 2004, the parties entered into a formal, written Settlement Agreement, which is on file with the Court and available on the Internet at https://www.paypal.com/settlement/. By entering into the Settlement Agreement, PayPal is not admitting any wrongdoing. PayPal continues to believe that it did not do anything wrong. The Representative Plaintiffs and the attorneys appointed by the Court to represent the Class believe that the settlement is fair to Class Members. By this notice, the Court is not expressing any view on the merits of the lawsuit.
4. HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?
On July 12, 2004, Judge Fogel entered an order granting preliminary approval of the settlement and certifying the
© 2004 The SCO Group, Inc. All Rights Reserved.
No, they made PayPal put up a link: https:/www.paypal.com/settlement/ to prove that it's not a fraud.
-Wes
The rules of submission require you to state that you experienced a financial loss, due to very specific circumstances. Most PayPal account holders (the vast majority, I think) have experienced no financial losses as a result of any of the claims stated in this class action's resolution.
Therefore, don't get too excited -- the average PayPal account holder gets nothing from this Class Action resolution...
-- -pjk Perry Kundert perry@kundert.ca http://kundert.2y.net
The settlement states that anyone who opened an account between Oct 1, 1999 and Jan 1, 2004 is elegible to participate in the settlement.
No it doesn't. It explicitly excludes residents of every country Paypal operates in except for the USA. I wish people in the USA wouldn't use the word "everyone" when what they mean is "everyone in the USA".
You obviously read wrong then. There are two types of claimants, and anyone who signed up between 1999 and 2004 has a claim to a portion of the settlement.
I think I'll stop here.
Paypal has a long history of bad customer service. Example: If someone used a bad / blocked credit card to pay you via PayPal, they immediately froze your account and all other money from legitimate sources. They are the ONLY credit card facility that will not take any risk. Read their terms and conditions for receivers of money. Result of this is that thousands of legitimate sellers lost access to millions of dollars for months and months while Paypal refused to help them. PayPal = Evil monopoly.
Not necessarily, here is one of possible reasons:
:)
You requested information from PayPal about an account restriction or limitation or unauthorized transfer and you did not receive a satisfactory response
So if you ever emailed their support about something related to the account and were not satisfied with their response, you are in
The wording of this says that you are automatically in the lawsuit. But if you want the money, then you have to claim it via an electronic form and then mail in the signature.
If you don't do that, then you don't get the money - but you are still considered to be in the lawsuit - which means that you then waive the right to sue them in the future for related issues.
But if you don't want to be in the lawsuit, then you have to also mail something in.
It also states that the lawyers get at least $3+M for this and that is out of nearly $10M.
I don't know how many people are in it, but the remainder of the money would then be split amongst those people.
So at most it is still under $100 - that isn't enough to pay me off so that I can't ever sue them again - even if it is only in a specific area.
There are some odd things afoot now, in the Villa Straylight.
That is just the poster ramling about nothing.
The amount you get for filling out the "short form" is $50.
The amount you get for filling out the long form is undetermined. **It all depends on how many people bother to collect**. The judgement was for 9.25 million - 3.4 million for legal leaves 5.85 million for settlements. Unless millions of people apply ( unlikely) you would likely get your $150 back, no problem.
***DO APPLY***
direct from the email
10. HOW WILL THE LAWYERS FOR THE CLASS BE PAID?
From the inception of the litigation in early 2002 to the present, Class Counsel have not received any payment for their services in prosecuting the case, nor have they been reimbursed for any out-of-pocket expenses. If the Court approves the proposed settlement, Class Counsel will make a motion to the Court for an award of attorneys' fees of up to $3,332,500 and reimbursement of expenses of up to $135,000, to be paid from the $9.25 million settlement fund. Class Counsel will also seek reimbursement from the settlement fund on behalf of certain of the named plaintiffs in the litigation for reimbursement of their expenses related to their service as class representatives in the litigation, in an aggregate amount not to exceed $15,000. The motion will be heard at the settlement hearing described below in Section 11.
Class Counsel's motion for an award of attorneys' fees and reimbursement of expenses is based on various factors that include the benefits obtained for the class through litigation. These benefits include the $9.25 million cash settlement and PayPal's agreement to the injunctive relief requirements. In addition, certain changes to PayPal's business practices are attributable in part to this litigation, including PayPal's decision to undertake to return to its customers approximately $5.1 million in those accounts to which access was limited for 180 days or more; modifications to PayPal's arbitration provision in its User Agreement and its replacement with a clause that limits PayPal's ability to compel arbitration where the total amount of the award sought is $10,000 or greater; and various other changes in PayPal's business practices during the pendency of the litigation.
Class Counsel submitted their proposed request for attorneys' fees to the Magistrate Judge who had previously presided over discovery and settlement discussions. Class Counsel's request for attorneys' fees is equal to the amount recommended by the Magistrate Judge.
Creationists are a lot like zombies. Slow, but powerful and numerous. And they all want to eat our brains.
Since you failed to read the settlement itself than you probably wont read this but...
4. HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?
On July 12, 2004, Judge Fogel entered an order granting preliminary approval of the settlement and certifying the following class for purposes of the settlement: All Persons who opened a PayPal account during the period from October 1, 1999 through January 31, 2004. Excluded from the class are any judicial officer to whom the lawsuit is assigned; PayPal and any of its affiliates; any current or former employee, officer, or director of PayPal; anyone who resides in Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, The Netherlands, or United Kingdom; and all persons who timely and validly request exclusion from the class pursuant to this notice.
I think this is because Paypal will charge your credit card, and there are quite a lot of consumer laws concerning cards that state you must have a course of redress if anything goes wrong, re-billing if the card they accept turns out to be stolen etc etc.
The difference with cash is that you're not playing with credit - just real money, and that's not regulated.
I think Paypal just want to be an intermediary with no obligations other than to say 'nothing to do with us mate', and 'we have charged you our fee for using paypal. have a nice day'.
"I'm so ready to receive my check for $0.35US"
..... ;)
Think again
"The claims administrator will not issue checks for less than $1.00. Such amounts will instead be reallocated to those claimants who are entitled to receive distributions."
[alk]
Some people actually like Paypal. Maybe you'd like to accuse iPod lovers of astroturfing? Linksys / Cisco lovers? Or is astroturfing reserved for groups on slashdot whose opinion are a minority? There's a lot of brand loyalty on slashdot, despite the air of anti-corporatism.
This page raises some good possible issues about at least one anti-paypal site, and shows that some claims against paypal payments are also true of many other forms of payment:
Adzooks: Paypal ain't my buddy
Everyone is entitled to statutory damages:
"The plan of allocation designates $1 million of the Net Settlement Fund to a "Statutory Damage Fund," to be distributed equally among all Fund Claimants who are not Dispute Resolution Claimants."
If you want to claim these damages, you must mail them a letter with your signature. So I suggest you don't bother as the amount of the stamp will likely be greater than the amount of the settlement damages paid.
No, there are two classes, the first is the standard settlement which only requires you to have openned your account in the window. The other class is the "disputed" class that requires that you fill out one of the two forms and receives a different settlement. The first class divides equally the sum of $1 million, the second divides according to awards.
Never confuse volume with power.
You are going to get your percentage of the 9.5 million based on the amount of claims made and the amount you claim and can legally prove was stolen from due to neglect on paypal's part.
For instance I had a loss of $80 + over $100 in collection costs/subpoenas in 2002. If there are claims for OVER 9.5 million, the claims will start to be divided into the percent that you made it up to 9.5 million.
I am hoping that I will get at least $100.
The 35 cents was a stupid quip the editor made.
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
You can make a Short Form Claim if, prior to February 1, 2004, PayPal caused you to lose money because of any of the following:
Log into your paypal account. In the My Account/Overview section, look for your Name, Email and Status, click on the little number in parentheses next to status (looks like this):
Status: Verified (23)
That will give you your member info box with your sign up date.
-gary
The folks over at PayPalSucks.com have been fighting the shady practices of PayPal since its inception. It's a great source of information and a good browse for everyone who has accounts with PP. Just keept the bias in mind ;) Here's a link to their discussion forum regarding the settlement. Very informative.
NMG
That's a nice thought, but the settlement email very specifically states that you have to swear under penalty of perjury that you were harmed in some way by PayPal (that you experienced an unauthorized money transfer, denial of access to your account, etc).
Daniel
Hurry up and jump on the individualist bandwagon!
Actually, the short form gets you $50, deposited to your PayPal account, or $49 by form of a check. I didn't see details, but I assume the long form would be based upon proveable losses.
Linux: The world's best text-adventure game.
whenever you receive money in your paypal account, immediately withdraw it. I do a lot of eBaying and I check it every night and withdraw any cash in the account. They can't steal what isn't there.
You need to read it again. In particular the section regarding "Statutory Damage Fund Claimants".
- Toby
I highly recommend people read "A Civil Action" (versus seeing the movie). It's a non-fiction account of a environmental case in Woburn, Massachusetts, where left-behind waste caused significant cancers in local residents. The suit was settled, and the payoff to families was smaller than they'd hoped for or needed. The law firm got quite a lot of the money. BUT the firm still ran at a loss and had to close. Why? Plaintiff lawyers fight an incredible uphill battle when they're up against large corporate defendents. The costs of running a suit like that are enormous. Read the book to see where the money goes and just how hard it is to make a class action suit work.
If you believe you are a claim member and do not fall within the definition of a "Dispute Resolution Claimant" as defined in the Notice of Pendency of Class Action and Proposed Settlement you can make a claim for a payment from the Statutory Damage Fund.
Use this form to file a statutory damage claim.
Dude, I think I can see my house from here.