• Report: #564162
Complaint Review:


  • Submitted: Wed, February 03, 2010
  • Updated: Wed, February 03, 2010

  • Reported By: Kitsch-n-Kaboodle — Philadelphia Pennsylvania United States of America
Internet United States of America

Paypal Paypal Inc. Paypal not honoring class action settlement of 2004- collections after over 6 years Internet

REBUTTAL BOX™ | Respond to this Report! | Consumer Comment

What's this?
Corporate Advocacy Program

Show customers why they should trust your business over your competitors...

What's this?
What's this?
Is this
Ripoff Report
About you?
Ripoff Report
A business' first
line of defense
on the Internet.
If your business is
willing to make a
commitment to
customer satisfaction
Click here now..

Does your business have a bad reputation?
Fix it the right way.
Corporate Advocacy Program™

Set the record straight:
Arbitration Program

SEO Reputation Management at its best!

     Paypal is at it again, folks- 

..... but not in the way that you might think, if you are in the know about the trials and tribulations of the ongoing decade-long saga of small business vs. Paypal Inc.  (if not, you may simply google paypal settlement, paypalsux.com, paypalwarning.com, or any of a half dozen similar sites)

   No, no-  they are up to new, even worse violations of the consumer's trust now.......
    Violating the Class Action Settlement!

    I recently received a collections notice from a third-party collection agency requesting that I pay $242 and change, which listed Paypal Inc as the creditor. (I'm not certain if I should post the name of that company here...) 

   The problem you ask?  

   I have not had a Paypal account since 2003, and the alleged debt they are collecting revolved around circumstances specifically settled in the Paypal Class Action Settle of 2004, which includes all persons who had an account at that time:

"All persons who opened a paypal account between October 1, 1999, and January 31, 2004."

    BUT ALSO stipulates specifically that there are two classes of claimants, and my account, which they are trying to collect on now almost 7 years later, fits within the Definitions section of the Settlement, which is California CV-02-01227-JF PVT,

    subsection (C) Dispute Resolution Claimants, who (ii) experienced or reported to Paypal an unauthorized electronic transfer... (b) in connection with chargebacks, refunds, buyer complaints, Paypal's Seller Protection Policy....

    I had sold furniture to a customer on ebay way back at that time, who suffered buyer's remorse.  Unfortunately I had already shipped the goods, and when you send furniture, or any large item, there is no way to get it back once shipped.   It doesn't have return shipping, as a parcel or letter in the mail would have.  The end result of this is that even though the product arrived, the customer filed a chargeback dispute for INR (Item Not Received).

    Why is this unusual you ask?
    In a normal INR with a real merchant account, Federal regulations require the banking institution to allow the vendor to produce proof of shipment.  We were reassured several times during that process by Paypal representatives that we were ok and would be covered by the policies.  They told me specifically not to worry, and told me I had done everything I was supposed to. 

   But in the end they gave the customer back their money, debiting from our Paypal account, and not only allowed the customer to keep our product, but insisted we were not allowed to retrieve it-- a violation of the Uniform Commercial Code and the Statute of Frauds-  if you are forced into a return or refund, as a business owner, you have a legal right to reclaim your unpaid-for property.  I not only lost my product, but also the money I spent shipping it to the customer.

    In a normal INR with a real merchant processing firm, you provide your proof of shipment and proof of delivery.  Paypal refused to even look at mine- they specifically told me over the phone, when I pressed them about it 'we don't hire personnel for that' and then the same Paypal rep told me over the phone that they had received my delivery proof but immediately put it in the trash! 

    And why you ask?
    Because we didn't ship it UPS.   Paypal is the only creditcard processing firm in the industry who discriminates against vendors based not on the quality or verification of shipping, but on the shipping method or carrier alone.  And yet they continue, to this day, to market Seller Protection to vendors who sell products that those shipping carriers will not accept for shipment!  A dining table is too large for regular-old UPS ground shipping.  And now ebay and paypal let customers grade us on shipping cost, so of course the vendors are going to ship things with other carriers, when necessary.  Ok, they didn't have DSR's back then, but why is Paypal telling me I am covered with my expensive freight shipment when they have no intention of protecting me against fraud?

   That means:   if you are accepting Paypal for an item, and you ship it with any other carrier, even if that carrier is well-respected, legitimate, and you follow all the other policies to qualify for protection, and it may be the only available shipping method, Paypal will still give the customer back their $ and allow them to keep your product.  Meanwhile they will lie to you and trick you into believing you are covered by their policies, and trick you into doing nothing with any other agency to retrieve your rightful property.

   They rely on their TOS (terms of service)- it's in the fine print.  They say in order to be covered by Seller Protection, you must ship your item with UPS or the US Postal Service.  ALL other carriers are NEVER covered by protection of any kind, and that includes all chargeback disputes, even if they are fraudulent.  The customer can lie about having received the goods and be rewarded a full refund while controlling or keeping your property, and Paypal will support them in doing so.  Really?  So in other words, Paypal can use the fine print of their terms to aid and abet Fraud and Theft?  Paypal can use their terms to violate my property rights?

   Paypal told me at that time that I was covered, which was a complete lie.  And they found in the customer's favor without giving me my property back, and then they refused to accept my shipping and delivery proof, purposefully destroying it.  Paypal needs to figure out the meaning of Failure of Consideration, Creditcard Fraud, and Theft of Movable Property.

   But here is what Paypal got in trouble for in the Class Action Suits-  they do not consider themselves to be a real Merchant Processing Company or a bank, and so therefore they claim they can ignore the federal laws protecting merchants.  They were subsequently sued in the state of CA in 2004 in a massive class action lawsuit.  Here are the details for that settlement:  settlementforonlinepayments.com

Here's where we come to the present day, and the latest outrage from Paypal:

   Although we filed claims with the suit administrator, here we are 5 years later and never received the claims checks.  (We lost property three times, on two separate accounts, because we are a family business with more than one seller- we were due two claims checks, each for $50, totaling $100.)

   And here is Paypal, violating the settlement, billing me over $240 for a charge they illegally debited me for to begin with, on an account that was legally settled with the court of the State of California in 2004-2005.  I am prevented by the terms of that settlement to make any further claims against them for these circumstances.  How does that entitle them to make counter-claims against me as a result of their own wrong-doing after so long?

   What is wrong with this company?   Do they not have any code of business ethics oncesoever?  I can't believe they would have the audacity to send a collections agency after me after 6 1/2 years of multi-million-dollar settlements, legal wrangling with thousands of other frustrated consumers like me.  

I'm no lawyer, but I can do my research, and this has to be a violation of the Fair Debt Collection Practices Act.....

   Meanwhile, since 2003 my small furniture business has prospered, continuing to provide outstanding service to eBay and the rest of the internet community WITHOUT PAYPAL and without those ridiculous fraudulent INR disputes they have become synonymous with. 

Look at the record: 
     In two years of dealing with Paypal, we lost 3 items to fraud via illegitimate paypal disputes and the iniquities of their Service terms.  We finally wised up and began running all internet purchases through a real Merchant Processing Company that was already handling our counter sales at the local store, and in 6 1/2 years after getting rid of paypal, with the traditional merchant processing firm we have only ever had 2 fraudulent disputes-  and we won both of them!  In fact, we used proof of delivery from the same carrier Paypal put in the trash a few years prior.

    Look at the math of that, folks.   2 cases of buyer fraud in over 6 years of business, both won in favor of vendor, compared to 3x on paypal in only 2 years, and Paypal let them all get away with it AND keep our property. 

The third case that tipped the scales and caused us to leave Paypal back then was a 20-dollar toy, and a customer who was subsequently investigated by the Postal Inspector for mail fraud, and permanently removed from ebay after he did the same thing to 6x different ebay sellers.  And yet Paypal, to this day, finds in his favor, even though I had shipped it with their approved shipper, the US Postal Service.


This report was posted on Ripoff Report on 02/03/2010 04:44 PM and is a permanent record located here: http://www.ripoffreport.com/reports/paypal/internet/paypal-paypal-inc-paypal-not-honoring-class-action-settlement-of-2004-collections-after-564162. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

Click Here to read other Ripoff Reports on Paypal

Search for additional reports

If you would like to see more Rip-off Reports on this company/individual, search here:

Search Tips
Report & Rebuttal
Respond to this report!
What's this?
Also a victim?
What's this?
Repair Your Reputation!
What's this?