All About PayPal Lawsuits

Learn what PayPal lawsuits are out there, and how to take action…

PayPal is one of the most popular electronic wallet and financial services in the world. The company operates all over the globe and makes it possible for customers to use multiple types of currencies, send and receive money, and enjoy many of the same features and functions as a checking account but without the hefty fees or strings of a local bank. However, that does not mean that they are immune to lawsuits.

Here is what you should know about PayPal lawsuits.

Or, you can Start a Claim against PayPal now


Are lawsuits against PayPal allowed?

Firstly, are PayPal lawsuits even allowed? Technically yes, it is perfectly legal to file a lawsuit against PayPal. However, in most cases you are restricted in how you can successfully do so because of the language in your user agreement. PayPal user agreements typically stipulate that you have to use something like consumer arbitration or small claims court instead of a “normal” state or federal courts.

We may be biased, but arbitration is often the better option. Plus, it is the one where we can help you.


What is a Class Action Lawsuit? Can I file a Class Action Lawsuit against PayPal?

You might have heard of class action lawsuits. Class action lawsuits are a type of lawsuit filed against a large company like PayPal on behalf of hundreds if not thousands of customers. When a whole group of people have the same complaint they can come together and file one single class action lawsuit. 

However, because of the language in your user agreement, you are likely prevented from jumping into any class action lawsuit against PayPal even if one exists. This means that your options are more limited, and typically a little bit more private. Class action lawsuits draw a lot of attention because the public documents are available online for anyone to read. But if you use arbitration, you can still get the settlement you deserve for your issue without earning PayPal a lot of negative press.

The following lawsuits are usually filed by a government entity, corporate disputes, or individuals who worked for the company rather than used the services of the company.

With FairShake, we are streamlining the PayPal lawsuit process. PayPal complaints are common and usually customers have similar issues regarding their legal rights.

Rather than trying to join a class-action lawsuit which is usually not possible, we file a personalized legal document with PayPal and guide you through the steps for consumer arbitration.

Start Your Own Claim in Under 10 Minutes


As a PayPal customer, what are my options for a lawsuit?

There are many ways you can submit a claim against PayPal, like using the FCC or your connected bank account. However, your legal path for lawsuits includes two options:

  1. You can sue PayPal in small claims court.  If you do this you have to go to court, attend hearings, file paperwork, and pay legal fees.
  2. You can use consumer arbitration. Consumer arbitration is something laid out in your PayPal contract and it lets you present your side of the case to an independent arbitrator who, like a judge, makes the final ruling and can force PayPal to give you compensation. With FairShake this process is easy and convenient. Find out how

While the PayPal lawsuits below give good information for customers, chances are in your contract, there is language that stops you from suing PayPal in a “normal” court. Instead, in most cases you have to use arbitration. FairShake can help you navigate the arbitration process and get compensation you deserve. 

Watch: How to File an Official Claim against PayPal

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Recent and notable PayPal lawsuits:

PayPal Lawsuit over Frozen Funds

In this attempted lawsuit, a young woman claims that PayPal froze her money for over a year. At the start of the covid pandemic, she says, her unemployment benefits were sent to PayPal rather than to a checking account but the company froze her account, cutting off access to our benefits.

This is a common situation that many FairShake customers say PayPal has put them in as well.

PayPal Lawsuits over Investigation Disclosure

PayPal has been under investigation by the SEC for unlawful debit card and PayPal credit practices. Legally, the theory goes, PayPal was required to disclose this information to investors in a timely manner.

In California a lawsuit was filed because of the failure of the company to disclose these investigations.

Looking for more examples of PayPal complaints? See more in FairShake’s PayPal complaints library

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