SAN FRANCISCO (CN) - Online retailers claim in a federal class action that PayPal closed their accounts and held onto their money for six months, offering only the vague and unfounded excuse of suspicious account activity.
Lead plaintiff Moises Zepeda says he logged onto his PayPal account, which he uses for his business selling gift cards through eBay, and found a notification telling him his access had been limited.
To reinstate the account, he faxed proof of ownership of the last gift card he sold on eBay, but soon after, PayPal informed him through email that his account was being closed because of issues with security, Zepeda says.
The email stated: "'For the safety and security of the PayPal network, we often review accounts for potential risks. After reviewing your account, we have decided to close it because of security issues,'" Zepeda says.
PayPal told him in that message that he would have to wait 180 days before he could receive information on how collect the money in his account, Zepeda says. He claims he would not have used PayPal for his business had he known it would seize his money and hold it.
He demands restitution, compensatory and special damages for breach of contract and fiduciary duty. The putative class is represented by Brian Kabateck with Kabateck, Brown and Kellner of Los Angeles.
Follow @MariaDinzeo
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