Rhode Island Looking Into PayPal Freeze

     PROVIDENCE, R.I. (CN) – Rhode Island authorities are prepared to do battle with PayPal over claims that the online payments system improperly withheld money from one of its customers.
     A civil investigative demand filed April 6 by Rhode Island Attorney General Peter Kilmartin states that Eliezer Weisman’s account, which has “a substantial amount of money,” has been frozen for six months without any explanation.
     Rhode Island officials performed a preliminary investigation into the matter and have determined “it would be in the public interest to further investigate” the matter.
     According to state voting records, Weisman is 20 years old.
     “While the PayPal User Agreement lists a number of reasons why an account may arbitrarily be placed ‘on hold,’ the consumer has not been provided a specific reason and has no recourse to resolve the problem,” the demand letter states.
     PayPal did not immediately respond to an emailed request for comment.
     Amy Kempe, spokesperson for the Rhode Island Attorney General, declined to give details on the investigation but said the demand letter was filed because PayPal “has been unresponsive to our inquiries.”
     Kempe said PayPal has not responded to the court-filed demand letter either, but noted they have until April 18 to do so.
     The investigation was filed the same day as Rhode Island Gov. Gina Raimondo was quoted as saying she wanted to lure PayPal to her state, after the company canceled an expansion in North Carolina in protest to a new law there eliminating anti-discrimination protections for homosexuals using public accommodations.
     “I am saying to them we are a place of openness and tolerance in Rhode Island and it is a progressive place to start a business,” Raimondo was quoted as saying to the Providence Journal.
     PayPal has blocked accounts before, usually after some public controversy or legal issues. The most notable case was in 2010, when the company banned donations to WikiLeaks after the State Department deemed the investigative website’s activities illegal.
     Last year, PayPal was sued in a class-action lawsuit in Israel over allegations that the company arbitrarily freezes accounts.

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