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Paypal Slips 'No Class Action' Clause Into Policy Update
First time accepted submitter Guru80 writes "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. With so many privacy policies changing to include such wording, does it really hold any weight if some obscure and buried opt-out option isn't checked?"
Could this possibly hold up in court? Isn't it our right to sue?
EULA: You cannot sue us for any reason.
Agree to use our product.
God spoke to me
but they still get sued...
Anyone find out how to opt out? I sent in an email asking how last week but obviously haven't gotten a response.
Paypal is a fucking criminal organization!
Article/poster should discuss how to opt out and what if any, the consequences are.
excitingthingstodo.blogspot.com
According the the Supreme Court ... yes
Is it wrong ... yes
How do we fix it?
Alter the Federal Arbitration Act
http://www.nytimes.com/2011/04/28/business/28bizcourt.html?_r=0
*IANAL* of course.
Not everything written in an agreement will hold up in court, if/when tested. For example, you can't write an agreement that expressly violates laws. In particular, the purpose of class action suits is exactly to allow group action where individual "wrongs" are not large enough to prosecute, but combined are sufficiently big. Trying to circumvent the law the way PayPal is doing is by itself probably a good ground for a class action suit (but got to wait until some actual harm is done, afaik) :)
I have serious doubts that any agreement which lessens a parties status in law can stand up to the Federal Courts system. In essence your rights are your rights even when you don't want them to be. The notion that some people might be limited in relation to redress of a grievance in a court of law offends our constitution.
We need to start pressuring Congress to create a law stating that access to the courts is a fundamental right that cannot be denied as the terms of a contract.
Sheesh, evil *and* a jerk. -- Jade
Unless you opt out...
Best option IMHO is to opt out - as in, completely. As in, don't use Paypal, ever, for anything. There are alternatives.
Deja Moo: The distinct feeling that you've heard this bull before.
Not that I am defending it.
What a ride !!!
The US has gone from having one of the most exemplary consumer protection laws framework to one which basically fucks over the consumer 100% of the time.
USA uber alles.
I received the same thing from Amex the other day.
But the interesting thing is, suppose there's a class-action suit, when was the last time a group has received anything significant?
Amazon gave everyone $1.34 credit towards the customer's next purchase AT amazon.com.
Ticketmaster did the same, but around ~$1.00. Again, only if you buy more tickets through Ticketmaster.
Methinks end-user gets screwed anyways. Only ones who win are lawyers.
A Class action should be raised against this clause! Seeking punitive damages for even putting something like this in a contract.
Binding Arbitration is contract legalese for "meet our FOAF, the arbitrator...".
Think about it. Who is the arbitrator and who does he / she want to please / not piss off? Whose circle does he / she run in? Who is in a position to provide work / favors / introductions / etc. for him or her? Who does he or she identify with? The whole science of jury selection that lawyers apply them to so assiduously is based on the answer to those types of questions. And yet in "binding arbitration" you're being "paranoid" and "unreasonable" if you ask them. Oh, and you have no choice. Yeah, that's fair. Paypal effectively excludes itself from our centuries old year old legal system and does what it wants.
PayPal is guaranteed that *most* customers will not not select PayPal on account of this contract change. The only blow back they'll ever feel is if , for decades the most outrageous shit goes down under the name of "binding arbitration" that finally even the type of regressive reactionary Congress we have is forced to DO something about it.
What this means is you shouldn't base anything important on the allegedly contractually obligated behavior of PayPal. Be ready to walk away and be able to walk away.
And yes, I DO understand the deleterious effects frivolous lawsuits have on companies; see my posts under WoofyGoofy->Software Patents for details.
Binding arbitration.
most major multinational corporations preserve the tradition of arbitration as your only means of recourse as theyve found the courts rule far too often in the favour of the users. Court time is reserved strictly for corporations to battle other corporations for control of consumers but once that control is entrenched? your arbitrator should you elect to meet with one will likely be from a limited pool of closely guarded individuals with close ties to the corporations for whom they arbitrate. Your ruling, statements, and even the case itself will remain entirely confidential with rarely any record of it transpiring. Most importantly, Arbitration allows a corporation to remain blameless. Never having admitted fault, they secure their public image and in turn their investors confidence as arbitration amounts to nothing more than a kangaroo court.
Good people go to bed earlier.
Opt-Out Procedure. 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.
Here is where collective power would be of use. On the market side, we can exert pressure on paypal by making efforts to drive their customers to the competition (and reaching out to the competition to help them highlight their lack of this phrase). This approach does require there is actual viable competition, and that they don't pull the same crap (so in many markets it wouldn't be effective).
The second side is government. This is where regulation shines! Let's lobby Congress (and hell, local government) to pass laws forbidding private arbitration as a binding substitute for lawsuits. Let's use the power of the law to slap Paypal down and say "no, you are NOT allowed to do this to your customers".
This is OLD news: the announcement from PayPal went out over a month ago, and I mailed a signed opt-out declaration back to Paypal myself more than four weeks ago.
More important is that fact that Paypal actually had the decency - ??? - to include the opt-out exception in the first place. Do you have any idea how pervasive these clauses are now? ALL the corporate kids are doing it. If it's a business that provides a service and uses one-to-many type contracts - service agreements, terms of service, etc. - to establish the service, then you can bet such a clause is imminent if not already present. Valve added one months ago, AT&T did the same before PayPal, etc. EVERY service agreement will have one by the end of this year.
It's all thanks to yet another corporate-friendly ruling last year from the same Supreme Court that gave us the Citizens United ruling and allowed the upcoming election cycle to be fully bought.
Gone are the days when companies invested in bettering their products and protecting their customers.
It's now cheaper to invest in lawyers and better contracts, at which point these companies can continue to provide sub-par products or customer service with no ill consequence.
PayPal .. I use them everyday with no complaints ... heck I even like the product ... but with this latest update it reads like they are preparing for armageddon ... virtually every change leaves the customer worse off than before ...
Ranting a bit ... products are manufactured to fail ... customer service is designed to exhaust you ... contracts are designed to cheat you ... yet we keep pouring money into this stuff ...
"The world's best-loved way to pay and get paid."
Why would the best-loved way need a clause like that?
I stopped using paypal about 3 years ago.
How is that even considered evil?
Hm, let's check how to do this...
At least you don't have to deliver your opt-out notice in person and wrestle a grizzly to get inside their offices.
Yeah. My copy of the notice arrived a day earlier, even. As with Valve's change and eBay's, I thought they already had a no-CA clause anyway. All the Cool Kids, EULAs=sign away your first born and their virginity, class actions=free coupons for their service, et cetera.
So meh.
You can hold down the "B" button for continuous firing.
I hope opting out means they will permanently cancel my paypal account.
End User License Agreement:
You are to wear these clown shoes and refer to yourself as Merry.
I have altered the deal, pray I don't alter it any further.
[X] Accept [ ] Cancel
"We are not responsible for anything that happens to your vehicle in this parking lot" or those gravel trucks with the sign, "Stay 200 feet back, not responsible for damages."
Bullshit, you are still responsible. The sign do not form a valid contract, they are there so stupid people won't sue.
This one is particularly bad because there is no "obscure and buried opt-out option" to check. The process to opt-out requires you to mail a physical signed letter to some office. I'm pretty sure none of these terms are actually legal and enforceable, particularly in California where the courts have already struck down binding arbitration clauses before, but it's a deterrent to actual justice being served. My wish would be that the "Severability" clause was found illegal, so if the corporation decided to put something illegal in the contract, it voids the whole contract. That would be the only way to get the corporations to stop doing these things.
These coordinated actions are an open act of war against the entire middle class.
You can't just override laws. That's why they're laws!
Remember how they scammed Notch (Minecraft maker) out of $300,000 because suddenly there was a lot of money coming to his "account", and they called it "(probably) illegal activity", and just took it all!
They could do that, because PayPal is not a bank! So they don't even have to adhere to the already ridiculously lax bank laws.
But THIS they cannot do. It's illegal. And if they try it, they go to jail. End of story.
I call for a global boycott of their criminal asses.
Seriously, FUCK PAYPAL!
As it was pointed out several times when Sony pulled this crap, EULAs < Law.
The problem is not these EULAs, but the fact that regardless when you go to court, he with the more money wins.
Guess what? The one with the more money is pretty much always going to be paypal.
What do I know, I'm just an idiot, right?
They are a third party biller and as such, you can't dispute a billing error with your credit card company or bank. You must go to PayPal. That's why I stopped using them. All this other crap is just irrelevant silliness.
As for eBay, I bid/buy things from sellers that take other forms of payment. However, eBay makes it very hard for vendors to accept other forms of payment.
Who would of thunk that the selling of cute little Pez dispensers could lead to such evil.
.
Paypal operates as a bank out of Luxembourg, under European regulation. The EU has been notoriously tough on corporations (see Microsoft). In the case of an egregious violation, lodging a complaint with the regulating agency might work better than a costly court case anyhow.
You are all shills.
"Lastly, the agreement must be accompanied by six Unobtainums (TM) breakfast cereal boxtops (15 lb. boxes only), each featuring a Notary Public seal from the Third Bank of Neptune. The agreement must have been written on parchment during the reign of Charlemagne."
Its because of how sue happy people are anymore it results in companies doing stuff like this. Companies have to go to extreme measures and do everything they possibly can to shield themselves from legal action because people today are sue crazy. People will sue for every single thing they possibly can, no matter how small or trivial it is because they want money.
I personally dont blame any company that does. Sure a lot of people say its so they can screw over the little guy (because thats the popular bandwagon to be on) but in reality it is because the little guy is screwing over the company. Did you buy a medicine and get a tummy ache while using it? Then sue them in a class action suit. Did you trip and fall at the movies? Sue the theater for damages. Are you black and commited a crime then fought the police and got pepper sprayed? Sue the cops. Are you a woman who acts like a complete bitch and get fired? Sue your employer for sexual harrasement. Did you rob someones house and then get shot by the home owner while doing so? Sue them!
And when it comes to big companies like paypal they also do this to shield themselves from class action suits which are nothing more than money grabs from lawyers. Thats why you see so damn many ads on tv saying "Did you use this product in the past 10 years? Then call me to get your reimbursement in this class action suit". Sure some may say its just a way to get a company to change blah blah blah but at the end of the day its all about money and for lawyers its all about money and the chance to win a major case against a big company to earn prestiege.
Paypal is doing nothing more than protecting themselves against greedy and stupid people and nothing else.
The original heading was Paypal jumps on the "No Class Action" bandwagon with privacy change. Editors gonna edit.
Not to sound resentful, but I submitted this a month ago when it was first published. Actually, I do intend to sound a little resentful... What I submitted was the Ebay policy change, which is apparently being kept separate from the Paypal one. More importantly, you only have until Nov. 9th to opt out of the new Ebay policy.
Don't use PayPal
AT&T vs. Concepcion is what allowed companies to get away with this crap. The California Supreme Court rightly ruled that such clauses are "unconsionable" where there is disparate baragaining power between the two parties. Even before reading this case, I had the exact same train of logic. When I am negotiating with a peer, it is fine to agree to such clauses. When I have the upper hand, the court should not recognize such abusive clauses.
If the Supreme Court (led by Scalia in a 5-4 decision) won't shoot down suck idiotic clauses, then it is up to our Congress to do so. How many of you want to hold your breath waiting for that to happen.
if you are interested in more details, read the ruling here: http://www.supremecourt.gov/opinions/10pdf/09-893.pdf
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
if you have problems with paypal, your first mistake was to use paypal. They are not a bank.
After suffering with all of Paypals issues and hearing horror stories from other PayPal customers, this was the final straw.
The best way to make them reform their practices isn't to whine and complain, they figure as long as you put up with it, then no worries. The best way to get them to change their practices is to vote with your feet and let them know why you're leaving.
I closed my PayPal account last week and if it makes getting stuff on EBay harder, so be it. It's on them if they insist on me using it and they'll lose my business as well.
Don't anthropomorphize computers, they don't like it.
Opt-Out Procedure. 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.
I got the email ,and called them to see if there was a way to pot out over the phone or on the website, they said no, I ask what guarantee do you have of acknowledging you get my letter they said none, I said so it would cost me out of my pocket to mail you a reg. certified letter to provide my own guarantee you received my letter and they agreed , I sad that was unacceptable and would have to close my account if there was no other way and ask to speak to a supervisor they put one on the phone and I explained how I felt and wanted to close my account if it could not be resolved in some other way and the supervisor closed my account with out my permission...so if I want an account now I am automatically opted in... so I filed a complaint with the FTC... won't do much but I feel better... took a bit to find the address (of paypal) and pres. (of paypal) email address.... but I sent them that as well...(the FTC)
With this clause in place, and something big and bad happens, victims need to organize a single day for every user in the world to go to their local court houses and individually sue. Overwhelm them with little cases. That should make them change their minds.
#1) Sue right now, en masse, BEFORE the deadline. It doesn't matter what it's for, but if they get served 50 times a day, they'll get the hint they've pissed off someone.
#2) Sue later, and when you serve them, state in the serving that by accepting this serve, they agree to binding arbitration with an arbitor of your choosing (not theirs) regarding your violation of the law regarding their right to binding arbitration. Regardless of the outcome of the arbitration, your suit still stands unless that becomes a part of the settlement. Oh, but just to be a prick, you could give them less than 24 hours to opt out.
If telephones are outlawed, then only outlaws will have telephones.
Once again, we're seeing that Corporations have more rights than American citizens. These corporations can influence politics, influence elections, yet pay no income taxes (or practically nothing), provide nothing back to their host country, and yet have gamed the legal system so that they hold all the cards and it's like gambling against the house to go against them. Only when we've risen up with pitchforks and torches will things be able to change. It's going to take an act of civil war or something akin to the French Revolution to get us our country back from those greedy bastards that have stolen it from under our noses.
If telephones are outlawed, then only outlaws will have telephones.
Not sure how it is in the USA, but here in the Netherlands this is basically a nogo for corporations. By Dutch law a contract can never , ever go above the law and starting a lawsuit is a basic right by law. There is even a real danger for the corporation in questions that having such a clause in he contract invalidates the whole contract and the transaction falls back to "standard" terms. maybe i am a bit optimistic here but would this principle not also apply in any country, include the US of A?
Xbox Live updated, and the new TOS include this same crap.
Opt-out Word letter template. Fill it out. Send it in.
https://docs.google.com/open?id=0B54hcCtnn2DtNmwyWS0ya0xsdWM
I'm gettin' me one of them Walmart AMEX's
While I understand that these types of organizations need such protection they miss a big hole.
Instead of acting as a class simply have 10k people sue them individually (or in binding arb.)
It could easily be worse....
It's October 18th, and here's my official opt-out: I am opting out of Paypal's stupid no-class-action clause. If Paypal screws up badly enough to be sued, then I hereby retain the right to sue them. If the screwup affects lots of people, I hereby retain the right to start a class action lawsuit. If there's already one started by someone else, I hereby retain the right to join it. Okay, that covers it. Thanks for letting me post this somewhere where it can be found again should I ever need it, Slashdot.
I noticed the same thing when I got a dashboard update. IMHO, the companies should be able to change their legal policies on the fly -- as long as they are willing to refund you for all of the equipment/software/etc you have purchased if you don't find it acceptable.
Evolution: love it or leave it
No, seriously. Here is the email I received from PayPal on 10/10/2012 at 1am:
No, I didn't. I suppose that they wouldn't want to send it to customers in countries where a company can't deny you access to the legal system.
Are you a grammar Nazi? I'm trying to improve my English; please correct my errors!
In an update a few hours ago in the user agreement. Did they ever get rid of the nasty cookie? Any way I can restrict their cookies?
Thanks.
One of the many atrocities on the American Justice system already committed by this Supreme Court...
Eff Paypal.
I understand the reasoning behind class action suits perfectly well, and don't object to the theory in the least bit.
The problem I have with them is the fact that no matter how small a compensation is eventually awarded the "settlement class", the attorneys who brought the suit get a huge payout for themselves.
In normal court cases, there's a reasonable expectation of the wronged party receiving fair to excellent compensation when their case is won or settled. If the attorney felt he/she couldn't get you very much, you'd likely decide not to file suit in the first place. Many times, the attorney's pay is directly tied to the winnings as a percentage, motivating him/her to get as much as possible for you.
With class actions, it seems like any law office with some spare time can simply hear about some dissatisfaction out there with a product or service, ask people to email or call them if they've experienced it themselves, and put together a case. As long as they're awarded some big dollar figure as their own compensation in the eventual settlement, they can ask for VERY little for the rest of the settlement class.
I recall several of these class actions in the past where the eventual award was nothing more than a discount coupon off the purchase price of another product from the company. Why would I want to buy something else from the company that sold me a dud the last time?! That sounds to me like the lawyers just wanted to make sure the settlement went through so they'd get paid, so they asked for the smallest compensation possible for everyone else.
Paypal cancelled my account, because I wouldn't give them direct (i.e. ACH) access to my checking account. I don't think they do that any more, but my d'bag meter tends to stick once it gets in the red.
All of which is my way of saying that I'm not one bit surprised by this move.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
Says so right on the side of My PC.
Software Provider License Agreement:
By allowing the user of this PC to use your software, you agree to the following terms.
Your software *IS* guaranteed for the purpose the user uses it for, and you are liable for any damages or losses caused by your inept programmers.
Your legal-sleeze that tries to prevent you from being sued individually or in class action is null and void, you have no recourse but to be reemed openly in court, drop your trousers, bend over - no, you may not have lube.
Your software will be updated continuously for the betterment of the users, not your stock-holders. All updates will be free.
You will owe the user of this PC $150,000.00 a day for each day your software fails to work after the PC is updated or patched.
http://www.docdroid.net/1i67/paypal-opt-out-letter.odt.html
Geeks like to think that they can ignore politics, you can leave politics alone, but politics won't leave you alone.-rms
I think a clause like would be likely to fail in the UK as unfair (especially for EXISTING account holders).
Is this actually legal or are they just trying it on?
Insert
Customer support which is a mere deception, instant automated account freezing for the most ridiculous and trivial of flags, holding people's account balances hostage for a year or more.
It's a bad company in need of a bashing by both customers and regulators.
Just because the EULA says so, doesn't mean the courts agree.
I for one is pretty confident that the courts in my country will aprox... 5 min to rule that the user cannot be expected to understand or even read the EULA, and that agreement-by-click is in anyway binding.
So let them write what they want... If you have sane laws and court system, it'll bite them in the ass, as the courts will probably find the entire EULA invalid, due to a single section...
The U.S. government believes it has the right to kill anyone, anywhere, especially anyone living in a poor country with oil resources. Misusing contract law seems mild by comparison to those who believe in killing.
Opt-Out now! Your rights are at stake! The attorney you've never met's livelihood is in peril!
In the end, it is a court that will decide if a lawsuit can go through or not, and courts always have the option to rule the EULA as invalid.
Monkey see, monkey do.
Let's face it, hardly any PayPal users are going to jump through the opt-out hoops. That means that the size of any potential class in a class action suit may be so small that it effectively means that most future abuses will still be considered just a cost of doing business. Also, fewer attorneys will be willing to take on a class action when there won't be a giant payout due to the class size being relatively small - better for the lawyers' bottom lines to target drug companies and go for the big payouts.
You can be sure that PayPal's own attorneys are well aware of this.
- T
They deliver everything to me electronically but I have to write a letter to opt out, jerks.
Opt-Out Procedure.
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.
Less *is* more.