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PayPal is sued for blocking accounts and keeping the funds

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Three PayPal users have filed a federal lawsuit against PayPal for freezing their accounts and funds without explanation. The lawsuit alleges that the company illegally seized their personal property and violated racketeering laws.

Their stories echo the problems of many when it comes to doing business with the payments giant.

We obtained a copy of the lawsuit for you here.

One of the plaintiffs, Shbadan Akylbekov, had his account frozen and $172,000 seized. The company did not explain why his account was frozen. He used the account of a company, owned by his wife, that sells Hyaluron pens, needle-less pens that inject hyaluronic acid.

The money disappeared after a six-month freeze of the account with PayPal saying that they “violated PayPal’s User Agreement and Acceptable Use Policy (AUP) by accepting payments for the sale of injectable fillers not approved by the FDA.”

But rather than simply ending the business relationship with the couple, PayPal allegedly decided to keep the funds.

RelatedPayPal co-founder David Sacks laments the company’s dark turn towards censorship

Another plaintiff, Lena Evans, who had used PayPal for 22 years, said her account was limited before the company kept $26,984.

The third plaintiff, Roni Shemtov, had her account frozen and $42,000 seized. She claims she did not get a sufficient explanation for the freezing of her account.

When she contacted the company, she received different explanations. One time, she was told that her account was frozen because there were multiple accounts using the same IP. Another time she was allegedly told that her account was frozen because she was selling yoga clothing at 20 to 30% less than the market price.

Another customer care rep told her that she was banned because she had multiple accounts, which she claims she doesn’t.

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