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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?"
EULA: You cannot sue us for any reason.
Agree to use our product.
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You have the right to remain silent.
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
Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.
Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.
Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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.
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
Not that I am defending it.
Could this possibly hold up in court? Isn't it our right to sue?
The supreme court ruled in April 2011 that not only can they require you to agree to not form a class action, but they can also require you to mediate all claims in forced binding arbitration (basically, a parallel court system bought and sold by corporations).
It was a 5-4 decision, and pretty much every agreement is now including this boilerplate legal text. They don't even HAVE to offer an opt-out. AT&T started it, followed up by all cell phone carriers, Sony, Microsoft, Ebay, etc etc etc.
The mere fact that the decision was split shows that even the justices don't know what rights there ought to be, and, unfortunately, the opinion of 5 of them means that corporations now have the right to collude against the consumer. After all, if everyone does it, the consumer has no choice.
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.
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.
Yes, in both AT&T Mobility LLC v. Conception and CompuCredit Corp. v. Greenwood the court has reinforced that you may enter into a contract which gives away your right to a jury of your peers for civil matters. Only in cases of outright fraud, either in the creation of the agreement or in the arbitration process will the courts intervene.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.
The point is not to give victims money, but to force company to change its illegal practices. And as usual with companies, best incentive is money and lots of it.
Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.
Well, if things reached the point where class action is needed, then obviously company did not make things better earlier.
Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.
Very funny. Almost nobody will sue separately, because bankrupting yourself on lawyer fees is not exactly rational thing to do when company cheated you out of $100.
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.
Could this possibly hold up in court? Isn't it our right to sue?
This isn't legal in the various provinces/territories of Canada. Each has their own CPA(consumer protection act), but each act pretty much has a section that says you can not be forced to waive any legal right.
Om, nomnomnom...
Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.
Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.
Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.
You Sir have a real problem understanding the rationale for a class action. It is not there to make the victims milionaires. It is there as a way to inflict punitive damages to a corporation.
Without class actions it becomes almost impossible for a single guy to "fight" against the wrong doings of a corporation. Think about the tabacco industry and where we would be without class actions suits against them. Taking away this tool was one of the most brain dead decisions the justice system ever made.
Those who are against class action as a puntive tool against corporations are either idiots (genuine idiots) or bought off by corporations.
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.
In theory, Google Wallet, Moneybookers, Amazon Payments, others. In practice, most online stores support only Paypal.
(Heh. I recall making my first internet purchases around 2004-2005, and it was hell to even get Paypal support back then. Even stores that used it often required you to combine it with a credit card rather than using the account balance or debiting a bank account. Since the idea of Paypal was to avoid credit cards, that was kinda self-defeating.)
If a company cheated you out of $100 just go to small claims court, no lawyer needed and in most states no lawyers allowed. Of course filing fees and your time make small claims court mostly a waste for $100, but for say $500 it's an option.
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That doesn't make it right to ban them though.
Frankly I'm amazed the law in the US even allows them to do this. In the UK contracts cannot take away your legal rights, including the right to take legal action.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Hi! Welcome to the real world, where people don't have an extra 40 hours of time to pursue a $500 claim.
It's interesting that PayPal can change the agreement unilaterally without a signed statement but the user must provide a signed statement to get out of their unilateral change.
So since the courts have already decided that corporations can unilaterally change these agreements does that same reasoning extend to users changing them unilaterally? So if I don't agree to section 1.4 I can simply rewrite it to suit me and send a notice to the company stating they can opt out of this change only in the next month in signed statement. Cool!
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Here's your answer.
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
BS! - you live in Arizona and want so sue a NY company in small claims court there for $ 100 or $ 500.
AFAIK, you'll have to sue in the same state's/county small claims court.
Also - my experience with a big wig Co in small claims court - their attorneys did not appear, known to Court Clerk, they PHONED IN and settled!
But I never got the court/process cost refunded because the Co. closed their local branch.
The US government is a wholly owned subsidiary of the US corporations. Are you really that amazed?
Unix is user friendly, it's just selective about who its friends are.
"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."
You have to sue in the state where the crime/offense occurred. That is not where it was mailed from, it is where it was ordered and received.
Reality is the NY company will not show up, get a default judgement (IF you know the proper way to ask for it, otherwise the judge will say there is nothing he can do if the defendant doesn't show up) and nothing will happen. Maybe, if you are lucky they will pay an in state lawyer who will show up, and request continuances until you do not show up, the then default goes against you.
The entire system is ALWAYS rigged for businesses and lawyers, period.
If by some miniscule chance you and the company get before a judge, he will totally ignore any resemblance to law and always side with the company. If you wanted to argue legal facts for real, you would not have gone to small claims court in the first place, but instead paid a lot for a lawyer and demanded a real trial!
slashdot troll = you make a compelling argument I do not like the implications of.
Sounds great.
I guess the first step is to call customer service, they give you the run around and basically laugh you off.
Second step is to ask for a manager who you never really get to speak to but maybe get to leave a voice mail or email to some generic mail box that in turn tells you the same thing but more cordially of course.
Now you either just give up because you've spent 10+ hrs time on hold and 2+ hrs on the phone trying to get transferred to the "Right Person(TM)" or you try to take it to the next step, Corporate!
They send you a canned message citing policy and some obscure paragraph in the 100 page agreement you clicked "Agree" to.
Even if you still believe you are right now you file a claim in small claims court. You get sent a library of congress sized package outlining why they believe they are right and you are wrong. You feel over whelmed and retain a lawyer to see the best course of action for a small fee of a couple grand. The lawyer says it will also cost an additional fee to read the mountain of paper sent and no guarantee but the outlook could be good!
2 months to the court date just to find out they need another court date because your TOS has changed (you did agree to the new terms last time you logged back in right?). All said and done 2 years later you may get an agreement of %50 of you original claim or settle out of court for %75 if you sign away all your future claim rights. Mean while the lawyer gets to trump up his fees and gets reimbursed 100% and you get $50 of your $100 claim.
So you think it's more profitable to sue individually? Please explain!
A loop, by its nature, continues. If that didn't make sense, start reading this sentence again.
Well, yes and no.
I agree that the lawyers often take advantage of claimants, but this is due to the victims not really understanding the effect of the suit.
Class action lawsuits are not really designed to compensate the victim in the first place, they just punish the perpetrator. They act as an almost private DoJ.. many of our laws are written in such a way that the police/DoJ/regulators have no authority to actually go after illegal acts, with the only redress being a lawsuit.... I suspect it was supposed to be part of the American 'fate in your own hands' mentality, but really it is a copout of the justice system since really they should be the ones enforcing the laws, not groups of citizens and a team of very hopeful lawyers.
They do however at least provide SOME counterbalance. Individual victims rarely have the resources to take on companies with dedicated legal teams. Many companies are trying to slip this kind of language into their agreements because unlike individual suits or the DoJ, class action lawsuits actually represent potential legal and economic consequences for poor behavior. With that tool taken away, their incentive to behave is significantly decreased.. esp in cases like paypal which have the weight to be a near monopoly in their domain.... and given the sketchy things paypal has been caught doing (such as simply keeping merchant's money for reasons they are not required to explain) I can see why they would want to shut this avenue down. Now all that will be left is criminal fraud or other violations.. which given how agreeable they have been at cutting money off from people the DoJ does not like but doesn't have a legal case against.. well.. I doubt they are going to be charged any time soon.
Small claims courts near the victim rarely have jurisdiction, esp when dealing with national or transnational companies. Often you have to take time off and travel to a jurisdiction of their choosing and file there, which can quickly cost more then $100.
Have you seen what they are already doing to their customer base? Ever seen their dispute resolution? It is a black box.... one day your money just disappears and you get an email saying 'we have determined you have violated XYZ, you have no recourse'. I sometimes wonder if they give out bonuses based off how much cash their case workers confiscate.
Or they do what the did to me, Hey you used your credit card with us to buy some gas at a place near work instead of home and that is suspicious so we are locking your account. Can't dispute, can't close it. It is here forever locked down till your grandkids die (or paypal dies whichever comes first).
At least I didn't actually have any funds in it.
I hope they die soon.
Even if they are not, I imagine that the power of choosing the arbitrator (and the money that goes with it) will be a powerful incentive for the 3rd party to keep them happy with pro-paypal rulings...
PayPal's time is passing anyway.
Bank Of America had a commercial last night proclaiming they have the same money-passing capabilities. There's also PopMoney, which has just started up and is signing up banks left, right, and sidewise, so they can integrate the same functionality into their own services (and apparently it allows you to use it even w/o your bank participating).
I'm guessing that eventually, aside from eBay, PayPal will eventually become obsolete.
Wont happen. Paypal works because of Ebay. If you use Ebay you must use Paypal. We had free effortless one click online payment systems in Europe for years, but we are still forced to using Paypal when we buy crap on Ebay.
Who logs in to gdm? Not I, said the duck.
And... judgements in small claims court are so enforceable, right? Yes, if you're the company, as you have many ways to extract the judgement. If you're the individual? Good luck with that.
Yes, judges have halted class action lawsuits due to an arbitration clause. It went all the way to SCOTUS and they ruled that such clauses are legally binding.
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.
If the company has any physical assets within the jurisdiction of the courts you can petition the court to demand payment and if they fail to respond the judge can and often will send the sheriff to seize those assets to satisfy the judgement. If the company has no presence in your location then the general solution is to turn it over to a collections agency, most companies will settle with a collections agency quickly as they don't want to have their creditors apprised of them not making good on obligations.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Don't use PayPal
The Consumerist has links to template letters for eBay (by November 9) and PayPal (by Dec. 1). You need to fill out, print and mail them by the deadline to opt out. That's physical, actual paper, snail mail. No online forms, no emails, no calls.
More info and speculation on whether you'll be deemed a troublemaker, persona non grata, communist, vegetarian, etc., etc. if you opt-out.
I am not a crackpot.
Why do you think it takes 40 hours?
Because I've done it. How many times have you done it?
Learn to love Alaska
There is no alternative if you want access to ebay. Nothing.
For many small sellers ebay is the only choice. The other auction sites are often too small to be significant.
I guess you could argue Amazon is in the hunt... but they're still small compared to ebay.
They get to send a lawyer in at least some cases. I sued a person who was insured, and the small claims court adjoined the insurance company (as they would be paying if I won), and a bar certified lawyer was allowed in a "no lawyers" small claims court to represent the company.
If they weren't allowed to send in a bar certified lawyer, they'd likely send in a paralegal, or other trained but not certified legal representative.
Learn to love Alaska
I paid a lawyer $200 to get out of $200 in fines. I pled guilty to the first hearing (he said you *never* win in the first one, no matter how right you are). Then appealed. On appeal I won. I got a ticket for "speeding" because I crashed my motorbike on a wet patch of leaves in a corner, after all, if I crashed, I was going too fast. No speed was listed. There were no witnesses. But if I crashed, I had to be guilty of something.
Learn to love Alaska
That's true only if you have previously explicitly agreed to the company's choice of venue/forum in a contract. Otherwise, as a rule, IIRC, you can sue in any of A. the court nearest the plaintiff, B. the court nearest the defendant, or C. the court nearest where the injury occurred. And even when the company has a choice-of-forum clause in a contract, the judge has the right to declare it unenforceable if it would pose undue hardship to an individual plaintiff suing a large, multinational corporation or would allow such a corporation to violate the public policy of the state where the plaintiff lives because of substantively weaker laws in the defendant's state (Doe 1 v. AOL LLC.
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And you'll do that for well under four hours of time?
Oh, not likely eh? Hm...
Seems like there's a case for class action suits after all...
Sure, they don't recover lots of resources for the plaintiff, but the costs are at least likely to cause the defendant to change their behavior. While I'd ideally like to have both come true, I'll opt for the latter if that is the best I can do.
When: ...the only reasonable approach is a class-action.
-an individual plaintiff is out less than several thousands+ of dollars and
-the defendant is a large company with lots of resources
-who refuses to negotiate in good faith to a resolution, and
-where lots of parties are impacted,
IMO, it's simply the only way the plaintiff parties will have any impact on the behavior of the defendant, and perhaps get some resources back. [Much less likely for the latter, but perhaps something.]
(And I'm someone who really has little care for the lawyers - but sometimes it's the only lever that works.)
-Greg
Yeah, pretty much. E-mail it in. Hell you should see me buying this house, I've spent under 8 hours on it. Mostly I sign papers and e-mail the realtor things, I've gone out there twice (once for a 3 hour inspection, the longest I've had to deal with anyone by far!). Most of the stuff has been handled on my smart phone while I'm waiting for an Arby's sandwich or sitting on the light rail.
I got a loan, a housing purchase contract, homeowner's insurance, an inspection (which I eventually had to show up and be present for, when it was actually going on), and a title company ready to close all with e-mail, a few phone calls that lasted 5 minutes, and a few hours of physically being places. You think I can't call a collection agency, forward a copy of my documents, sign some papers and send them in, and then sit back and let them collect?
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I'm a lawyer with some experience in conveyancing and real estate. I would not recommend doing the legal work yourself to buy a house. I would not do the legal work to buy my own house.
For most people the reason that I wouldn't recommend doing it themselves is that lawyers take time to handle conveyancing for a reason. Yes, some take too long - but even a good lawyer takes some time. Put simply, there are a lot of things that can go wrong when buying a house, and many of them are not obvious. A small defect - whether legal or physical - can mean that the biggest purchase you will ever make is worthless.
Even if you're bullish about your legal ability I still wouldn't recommend doing your own conveyancing - as I said, I certainly wouldn't do my own. The reason is that a massive advantage of using a lawyer is that they will have huge public liability insurance. If they miss something and you end up buying a house that suffers from some cryptic and technical legal defect you can recover your money. If you did your own conveyancing you would simply have thrown ten years' wages or more down the toilet. It's not worth the risk. Good luck getting comparable insurance for less than the cost of the lawyer - and read your policy very carefully because it is very easy to invalidate them on a technicality or slip through the net.
Why remain silent on this? Noise is the only way anything will change.
A vast, vast majority of EULAs are crammed full of effectively unenforceable lop-sided bullshit that would never hold up in court.
Like most morally-bankrupt companies with a back-pocket Army Of Lawyers, right here Paypal is banking on the fact that of the the small number of the 1% who read it that actually have a problem of some kind, requiring legal intervention, won't know their rights and settle through loaded arbitration instead of going to trial. This is par for the course.
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
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.