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Paypal Slips 'No Class Action' Clause Into Policy Update 294

Posted by timothy
from the real-class-actiony-paypal-real-class-actiony dept.
First time accepted submitter Guru80 writes "PayPal recently posted a new Policy Update which includes changes to the PayPal User Agreement. The update to the User Agreement is effective November 1, 2012 and contains several changes, including changes that affect how claims you and PayPal have against each other are resolved. You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis. With so many privacy policies changing to include such wording, does it really hold any weight if some obscure and buried opt-out option isn't checked?"
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Paypal Slips 'No Class Action' Clause Into Policy Update

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  • by GoodNewsJimDotCom (2244874) on Thursday October 18, 2012 @12:00PM (#41694607)
    EULA: You cannot sue us for any reason.

    Agree to use our product.
  • by GoodNewsJimDotCom (2244874) on Thursday October 18, 2012 @12:03PM (#41694649)
    All kidding aside, anyone notice how snarky it was for ebay to not call itself an online auction? If ebay was an auction site, it would have had to do so much localization because it'd be sued in every state and county with different rules for auctions. Also Paypal isn't a bank, so it doesn't have to deal with banking regulations.
  • by macraig (621737) <`mark.a.craig' `at' `gmail.com'> on Thursday October 18, 2012 @12:18PM (#41694949)

    This is OLD news: the announcement from PayPal went out over a month ago, and I mailed a signed opt-out declaration back to Paypal myself more than four weeks ago.

    More important is that fact that Paypal actually had the decency - ??? - to include the opt-out exception in the first place. Do you have any idea how pervasive these clauses are now? ALL the corporate kids are doing it. If it's a business that provides a service and uses one-to-many type contracts - service agreements, terms of service, etc. - to establish the service, then you can bet such a clause is imminent if not already present. Valve added one months ago, AT&T did the same before PayPal, etc. EVERY service agreement will have one by the end of this year.

    It's all thanks to yet another corporate-friendly ruling last year from the same Supreme Court that gave us the Citizens United ruling and allowed the upcoming election cycle to be fully bought.

  • Re:Legal? (Score:5, Insightful)

    by qbast (1265706) on Thursday October 18, 2012 @12:19PM (#41694971)

    Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.

    The point is not to give victims money, but to force company to change its illegal practices. And as usual with companies, best incentive is money and lots of it.

    Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.

    Well, if things reached the point where class action is needed, then obviously company did not make things better earlier.

    Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.

    Very funny. Almost nobody will sue separately, because bankrupting yourself on lawyer fees is not exactly rational thing to do when company cheated you out of $100.

  • by timeOday (582209) on Thursday October 18, 2012 @12:21PM (#41695003)
    It is absurdly out of hand. I noticed the other day when my 14-year-old fired up the XBox it hit him with another "Notice of Change to EULA" (which he of course ignored).

    The whole libertarian notion of mutual consent has become a complete farce. How could we have known 6 years ago when we bought this thing how much to pay for it, based on changes they would make far in the future, churned out by a team of lawyers so productive we'd never even have time to read it, even if we had the legal background to do so? Again, this is a legal sham.

  • Re:Legal? (Score:5, Insightful)

    by afidel (530433) on Thursday October 18, 2012 @12:32PM (#41695261)

    If a company cheated you out of $100 just go to small claims court, no lawyer needed and in most states no lawyers allowed. Of course filing fees and your time make small claims court mostly a waste for $100, but for say $500 it's an option.

  • Re:Legal? (Score:3, Insightful)

    by Anonymous Coward on Thursday October 18, 2012 @12:41PM (#41695443)

    Hi! Welcome to the real world, where people don't have an extra 40 hours of time to pursue a $500 claim.

  • by penix1 (722987) on Thursday October 18, 2012 @12:43PM (#41695513) Homepage

    You must sign the Opt-Out Notice for it to be effective.This procedure is the only way you can opt out of the Agreement to Arbitrate.

    It's interesting that PayPal can change the agreement unilaterally without a signed statement but the user must provide a signed statement to get out of their unilateral change.

    So since the courts have already decided that corporations can unilaterally change these agreements does that same reasoning extend to users changing them unilaterally? So if I don't agree to section 1.4 I can simply rewrite it to suit me and send a notice to the company stating they can opt out of this change only in the next month in signed statement. Cool!

  • Re:Legal? (Score:5, Insightful)

    by Shagg (99693) on Thursday October 18, 2012 @12:51PM (#41695675)

    The US government is a wholly owned subsidiary of the US corporations. Are you really that amazed?

  • Re:Legal? (Score:5, Insightful)

    by jythie (914043) on Thursday October 18, 2012 @01:04PM (#41695881)
    Well, yes and no.

    I agree that the lawyers often take advantage of claimants, but this is due to the victims not really understanding the effect of the suit.

    Class action lawsuits are not really designed to compensate the victim in the first place, they just punish the perpetrator. They act as an almost private DoJ.. many of our laws are written in such a way that the police/DoJ/regulators have no authority to actually go after illegal acts, with the only redress being a lawsuit.... I suspect it was supposed to be part of the American 'fate in your own hands' mentality, but really it is a copout of the justice system since really they should be the ones enforcing the laws, not groups of citizens and a team of very hopeful lawyers.

    They do however at least provide SOME counterbalance. Individual victims rarely have the resources to take on companies with dedicated legal teams. Many companies are trying to slip this kind of language into their agreements because unlike individual suits or the DoJ, class action lawsuits actually represent potential legal and economic consequences for poor behavior. With that tool taken away, their incentive to behave is significantly decreased.. esp in cases like paypal which have the weight to be a near monopoly in their domain.... and given the sketchy things paypal has been caught doing (such as simply keeping merchant's money for reasons they are not required to explain) I can see why they would want to shut this avenue down. Now all that will be left is criminal fraud or other violations.. which given how agreeable they have been at cutting money off from people the DoJ does not like but doesn't have a legal case against.. well.. I doubt they are going to be charged any time soon.
  • Re:Legal? (Score:4, Insightful)

    by jythie (914043) on Thursday October 18, 2012 @01:09PM (#41695967)
    Have you seen what they are already doing to their customer base? Ever seen their dispute resolution? It is a black box.... one day your money just disappears and you get an email saying 'we have determined you have violated XYZ, you have no recourse'. I sometimes wonder if they give out bonuses based off how much cash their case workers confiscate.
  • Ultimate opt-out (Score:2, Insightful)

    by Anonymous Coward on Thursday October 18, 2012 @01:32PM (#41696381)

    Don't use PayPal

  • Re:Legal? (Score:4, Insightful)

    by AK Marc (707885) on Thursday October 18, 2012 @01:42PM (#41696569)
    I paid a lawyer $200 to get out of $200 in fines. I pled guilty to the first hearing (he said you *never* win in the first one, no matter how right you are). Then appealed. On appeal I won. I got a ticket for "speeding" because I crashed my motorbike on a wet patch of leaves in a corner, after all, if I crashed, I was going too fast. No speed was listed. There were no witnesses. But if I crashed, I had to be guilty of something.
  • Re:Legal? (Score:4, Insightful)

    by GSloop (165220) <networkguru@[ ]op.net ['slo' in gap]> on Thursday October 18, 2012 @02:49PM (#41697527) Homepage

    If the company has any physical assets within the jurisdiction of the courts you can petition the court to demand payment and if they fail to respond the judge can and often will send the sheriff to seize those assets to satisfy the judgement. If the company has no presence in your location then the general solution is to turn it over to a collections agency, most companies will settle with a collections agency quickly as they don't want to have their creditors apprised of them not making good on obligations.

    And you'll do that for well under four hours of time?

    Oh, not likely eh? Hm...
    Seems like there's a case for class action suits after all...

    Sure, they don't recover lots of resources for the plaintiff, but the costs are at least likely to cause the defendant to change their behavior. While I'd ideally like to have both come true, I'll opt for the latter if that is the best I can do.

    When:
    -an individual plaintiff is out less than several thousands+ of dollars and
    -the defendant is a large company with lots of resources
    -who refuses to negotiate in good faith to a resolution, and
    -where lots of parties are impacted, ...the only reasonable approach is a class-action.

    IMO, it's simply the only way the plaintiff parties will have any impact on the behavior of the defendant, and perhaps get some resources back. [Much less likely for the latter, but perhaps something.]

    (And I'm someone who really has little care for the lawyers - but sometimes it's the only lever that works.)

    -Greg

If money can't buy happiness, I guess you'll just have to rent it.

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