Two weeks ago, Eric Bensamochan announced the intent to sue PayPal on behalf of his client, Chris Moneymaker. The 2003 World Series of Poker Main Event champion and longtime poker pro used PayPal to hold money for friends in a fantasy sports league. Not only did PayPal seize that money, it confiscated it. Moneymaker sought legal counsel.
In the two weeks since Bensamochan and Moneymaker made public their goal of filing a class action lawsuit against PayPal, dozens of people have contacted the Bensamochan Law Firm. PayPal seized their funds as well and for a wide range of “violations.” And the amounts seized are as high as $550,000 – all confiscated by PayPal with little explanation and no chance to argue their case.
In a conversation with Bensamochan today, the Los Angeles-based attorney explained more about PayPal’s actions and the case he is building against the payment processing giant.
Quick Recap
When Bensamochan went pubic with the planned legal action just before Memorial Day weekend, Moneymaker told his PayPal story.
In essence, Moneymaker and 11 of his friends created a 12-member fantasy sports league for the 2020 NFL season. Prior to that season last year, each person ponied up $1K, which Moneymaker agreed to hold in a PayPal account. He charged no fees to his league participants; he merely volunteered to hold the money until the season was over.
In November 2020, PayPal put a hold on the account for violating its User Agreement. After six months of no contact from PayPal, Moneymaker sought a resolution to the matter, preferably a return of the money to each of the 11 individuals that originally sent money to him via PayPal. However, PayPal simply said no and confiscated the funds.
The end.
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“It’s About the Principle”
Not the end for Moneymaker at all.
Moneymaker approached Bensamochan about a potential lawsuit against PayPal. He said that he wanted the $12K back, obviously, but he saw the bigger picture. PayPal could simply seize the funds based on a massive legal document, keep the money, and not provide further explanation or opportunity for discussion.
“Somebody has to stand up to these guys,” Moneymaker said in the press release. He noted that the practice of confiscating money from customers is “immoral and illegal. “It’s about the principal of stealing other people’s money and hiding behind thousands of words of legal mumbo jumbo that no one reads.”
So, Bensamochan provided a means of contact – info@blawfirm.us – for anyone who had a similar experience with PayPal and had an interest in joining a class action lawsuit against PayPal.
Acceptable Use Policy
For nearly 20 years, PayPal has been an increasingly popular way to transfer money online without using traditional bank accounts. It has helped facilitate the global movement to a world in which online financial transactions dominate.
In the years since it went public in 2002, PayPal has acquired numerous competitors to include under its umbrella. The acquisitions began with companies like Bill Me Later and expanded to Venmo in 2013, Swift Financial in 2017, and GoPay and Honey in 2019. By 2021, PayPal operated in 202 markets and maintained 377 million active user accounts.
All users must sign the PayPal User Agreement, which is 68 pages in length. The accompanying Acceptable Use Policy is another two pages but details the specifics of activities prohibited by PayPal. Everyone who opens an account must agree to these documents, but many people have little choice if PayPal is the only option for transferring money online or providing an avenue for their small business to process payments.
Corporate Battle Too Much for Most
We spoke to Bensamochan to obtain more insight into the case.
First, he noted that PayPal has been traditionally difficult to fight. Many lawyers don’t want to take on such a massive corporation with seemingly unlimited resources. And people who find that their accounts are frozen don’t usually have the money to retain an attorney to fight PayPal. It doesn’t make much sense to pay $2,500 for an attorney to fight PayPal in the hopes of winning that $500 that PayPal seized.
Meanwhile, Bensamochan said that PayPal continues to seize accounts at will. The algorithms used by PayPal to flag accounts for investigations are unknown, but they tend to flag a lot of people for Terms of Service violations without explanations. And people who try to contact PayPal to discuss alleged violations often cannot get in touch with a human at the company to do so.
Not only can PayPal freeze accounts for 180 days while the company itself performs an investigation – of which the details are never made known to the customer – PayPal can also charge the customer up to $2,500 in fees for said investigations. And in the end, PayPal can simply confiscate the money with no further opportunity for discussion.
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Hoping to File by July 3
Since the original announcement of the class action pursuit, Bensamochan has heard from dozens of people…in the gambling world and well beyond, including small businesses and nonprofits as well as well-known professional poker players.
At this point, Bensamochan is collecting information and putting it together for the lawsuit. Moneymaker and four others will be the primary plaintiffs in the case, though Bensamochan has yet to reveal details about the other plaintiffs. They plan to file the case before July 3 and request an immediate certification of class action status.
Anyone wanting to discuss the possibility of joining the lawsuit should email info@eblawfirm.us or call 818-574-5740.
