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Old 07-29-2004, 04:28 AM   #1
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Join Date: Feb 2001
Posts: 119
Default PayPal Litigation Settlement...

I do not think it is the best board to post this thread. But since most of us here use paypal to receive payments from some ad sponsors and it is also my only usage of paypal, it is kinda related.

i received 2 mails today from paypal for my two paypal accounts.




In re PayPal litigation
Case No. CV-02-01227-JF (PVT)


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.

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.

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.

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.

Thus, if you opened a PayPal account between October 1, 1999 and January 31, 2004, and are not one of the excluded persons listed above, you are a member of the class.

To represent the class, the Court has appointed Plaintiffs Roberta Toher and Jeffrey Resnick as Representative Plaintiffs and their counsel of record as Class Counsel. The Court has also appointed the following attorneys and law firms as Co-Lead Counsel:

A. J. De Bartolomeo
Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

Robert C. Finkel
Wolf Popper LLP
845 Third Avenue
New York, New York 10022


A. Injunctive Relief
The settlement requires that PayPal consent to the entry of an order, called an injunction, that mandates various changes to PayPal's business practices. PayPal has already implemented these changes. The injunction includes PayPal's agreement to comply with certain notice and error resolution procedures of the EFTA, and to follow certain procedures for limiting accounts and responding to and returning funds to customers whose accounts have been limited. A copy of this injunction can be found as Exhibit D to the Settlement Agreement, entitled "Form of Injunctive Order."

B. Monetary Relief
Under the settlement, PayPal will pay $9.25 million into a settlement fund, to be held in an interest-bearing account. The fund will be used (1) to make payments to class members who submit valid claims before the claims deadline; (2) to pay certain costs of giving notice to the Class and of settlement administration, as approved by the Court; and (3) to pay attorneys' fees and expenses to Class Counsel in the amount awarded by the Court. Class Counsel have proposed that, after deduction of notice and administrative costs and Class Counsel's attorneys' fees and expenses, the balance of the fund ("Net Settlement Fund") be applied in accordance with a written plan of allocation. (The following explanation is qualified in its entirety by reference to the Plan of Allocation attached to the Settlement Agreement as Exhibit C, a copy of which is on file with the Court and available on the Internet at https://www.paypal.com/settlement/.)

1. Certain Definitions
Certain capitalized words are used in this part of the Notice to describe the way in which the Net Settlement Fund will be allocated. These capitalized words have the following meanings:
(a) "Released Persons" means PayPal and its past and present partners, affiliates, predecessors, successors, assigns, parents, subsidiaries, officers, directors, attorneys, and employees.

(b) "Fund Claimants" are class members who submit timely, valid claims in accordance with the procedures described in this notice.

(c) "Dispute Resolution Claimants" are Fund Claimants who contend that, prior to February 1, 2004, they:

(i) experienced or reported to PayPal an unauthorized or incorrect electronic transfer to or from their PayPal account including, without limitation, electronic transfers initiated by (a) the Fund Claimant; (b) PayPal in connection with, among other things, chargebacks, refunds, buyer complaints, PayPal's Seller Protection Policy, Buyer Complaint Process and/or Buyer Protection Policy; or (c) any third party;

(ii) had access to their PayPal account improperly, incorrectly or erroneously limited or restricted, in whole or in part;

(iii) made a request for information in connection with PayPal's restriction or limitation of the Fund Claimant's PayPal account or regarding an incorrect or unauthorized electronic transfer to which PayPal did not respond at all or did not respond to the Fund Claimant's satisfaction.
(d) "Statutory Damage Fund Claimants" are all Fund Claimants who are not Dispute Resolution Claimants.

2. Statutory Damage Fund Claimants
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. This means that if you are a member of the Class and do not fall within the definition of a "Dispute Resolution Claimant," as set out above, you can make a claim for a payment from the Statutory Damage Fund. The Statutory Damage Fund provides compensation for potential statutory damages under the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. §§ 1693 et seq. Statutory damages under the EFTA are limited by law to no more than $500,000 for any class of individuals claiming "the same failure to comply." Plaintiffs' counsel contended in the litigation and for purposes of settlement that PayPal was potentially liable for multiple failures to comply, a position PayPal vigorously opposed.

it seems u can get at least $50 bucks if you make a claim but it sounds US only from the style of claim form. Anyway, do u guys heard about it?

Eric_eLyrics is offline   Reply With Quote
Old 07-29-2004, 04:49 AM   #2
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I never got this email guys , that's good news or bad ??
Jamesbond is offline   Reply With Quote
Old 07-29-2004, 11:09 AM   #3
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I think it's good- PYPL has some ery bad practices when it comes to seizing money- a friend of mine that runs a website has over $2500 seized from his Paypal account because he had a half-nude picture of a woman on his blog where he took PYPL donations!

I'm sure there are more stories like this. Unfortunatly, 9.25 mil isn't a lot after you factor in that the attourneys will prob get about 3-4 million of that and then all of the claims.
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Old 07-29-2004, 03:42 PM   #4
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I did get an email, but it was 70k+ in size I believe, so I deleted it. Don't trust large emails, since most of them turn out to be worms. But I'm thinking now that this was legitimate
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Old 07-29-2004, 05:55 PM   #5
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I recieved this email, too. No attachments.

I thought it was another email from someone trying to **** people for their PP username/passwords, but it didn't ask for usernames or passwords, either.
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Old 08-01-2004, 12:30 AM   #6

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Location: Gold Coast, Queensland, Australia
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The claim is real.

That said, this is probably one occasion in which PayPal is going to profit from the rash of spam fraud that has been targeting the company's customers. I almost deleted the email also; choosing to read it primarily because I was curious as to what message the fraudsters were using this time. Given that the short form claims are limited to $50 (or less), PayPal will effectively save money for each email that is deleted by people like us who imagined this to be spam.

I'm surprised that the company wasn't required to distribute this message via traditional mail. Then again, this is the new economy.

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Czar is offline   Reply With Quote
Old 08-01-2004, 05:21 AM   #7
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Anybody filled out the claim form yet?
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Old 08-01-2004, 05:31 AM   #8
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I had over $21,000 frozen by paypal in 2001 because of a chain reaction I had nothing to do with. I sold something on ebay to a guy through paypal, that person had sold something to someone else, who had bought something from someone else that was reported stolen, because of that they went down the line and froze everyone who had any time of interation with the first person, even if you were 3 or 4 time sremoved from them and had nothing to do with the stolen goods. It took 2 court dates, a year and a half, and the help of NY States AWESOME Attourney General to get my money back, the person I sold my stuff to lived in Ohio, and still to this day hasn't gotten his account unfrozen
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Old 08-01-2004, 05:36 AM   #9
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Yes, I just got it... Will be interested to know if anyone has filed a claim or received the money.
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Old 08-01-2004, 07:38 AM   #10
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You can make a Long Form Claim if, prior to February 1, 2004, PayPal caused you to lose money because of any of the following:
You experienced an unauthorized or incorrect electronic transfer to or from your PayPal account;

Your PayPal account was improperly restricted or access was improperly limited;

You requested information from PayPal about an account restriction or limitation or unauthorized transfer and you did not receive a satisfactory response; and/or

You experienced or reported an unsatisfactory result from a dispute with PayPal involving a chargeback, a refund, a buyer complaint, or PayPal’s Seller Protection Policy, Buyer Complaint Process and/or Buyer Protection Policy.

Mmmmmmmmmm, i doubt i'd ever experienced any of those...
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Old 08-01-2004, 08:30 PM   #11
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"Your PayPal account was improperly restricted or access was improperly limited;"

I'm diffenetly filling a form out. This has happened two times, both of them costing me money.
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