PayPal Refunds Moneymaker but Lawsuit Continues

Last updated on June 18th, 2021

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It seems that PayPal wasn’t fond of a viral effort to gather unhappy customers for a class action lawsuit against the payment processor. The company refunded Chris Moneymaker, the initial person who pursued legal assistance for the $12K that PayPal confiscated from him. When dozens of people quickly contacted the Bensamochan Law Firm to add their names to the list of people who lost money in the same way – from hundreds of dollars to hundreds of thousands of dollars – PayPal decided to refund Moneymaker.

It makes one wonder if there is a connection between the threat of a class action lawsuit and Moneymaker’s refund…

Nevertheless, the lawsuit will move forward. While Moneymaker will not be a plaintiff in the case, he plans to consult on the case and use his platform to give a voice to others with claims against PayPal.

Frozen and Confiscated

The incident began with Chris Moneymaker and 11 friends pooling some funds to play in a personally-organized fantasy sports league for the 2020 NFL season. The friends each forwarded $1K to Moneymaker to hold in a PayPal account until the end of the season.

PayPal froze his entire account to do a 180-day investigation. The company claimed that he violated the PayPal user agreement by using the money in an unacceptable manner. Without further explanation, they froze the account in November 2020.

On April 14, Moneymaker received a notice that the $12,228.55 in his PayPal account was confiscated due to a violation of the terms of service. When he asked for details and tried to speak with someone to clear up any misunderstandings, he found that the company was unresponsive.

So @PayPal @AskPayPal froze my account last year and said i could access my money in 180 days. Well they straight up stole the money!!!! Money out of my account pic.twitter.com/fnQtkPw7s9
— Chris Moneymaker ⭕ (@CMONEYMAKER) May 18, 2021

So, Moneymaker reached out to Los Angeles-based attorney Eric Bensamochan to discuss suing PayPal for the money. They planned to file a federal lawsuit based on PayPal’s breach of contract, bad faith in that agreement, and unjust enrichment for confiscating the funds. Further, Moneymaker and Bensamochan issued a notice to gauge if there was interest from others in a class action case.

There was.

A Lawsuit, You Say?

In less than two weeks, Bensamochan told us that he received dozens of messages from people who had similar experiences with PayPal. Not all were related to gambling but all had a similar theme: PayPal used an automatic algorithm to flag accounts that may be in violation of their user agreements. Ultimately and without further explanation, PayPal then confiscated their monies.

We are signing on to the lawsuit. We just got a response from the attorney. We can't afford to lose 3500 for the cats in our care. We made commitments to them. Thank you Chris!!!! ❤
— Precious Purrs Feline Rescue (@PurrsFeline) June 17, 2021

So many possible plaintiffs contacted Bensamochan that he was preparing to file his case by July 3. He was going to choose several people to be the primary plaintiffs alongside Moneymaker and request an immediate certification of class action status so more people could join.

Was PayPal willing to risk a class action lawsuit with people from around the world willing to charge that the company confiscated their funds without proper investigation or explanation? Evidently not.

On June 17, Moneymaker tweeted that PayPal issued a “refund of AUP violations” in the amount of $12,228.55.

2/3 I guess @paypal chickened out and gave me my money back when they heard about the lawsuit and backlash. Unfortunately, for @paypal I have been contact by over 50 people that you have done this too. The lawsuit I am filing will continue!! pic.twitter.com/wUYOzsVyRy
— Chris Moneymaker ⭕ (@CMONEYMAKER) June 16, 2021

While that was justice for Moneymaker, it didn’t resolve the issue or even attempt to explain it. The precedent of a globally-dominant payment processor freezing accounts based on algorithms and “conducting investigations” only to confiscate the funds would not stand. Not if he and his attorney had anything to say about it.

Bensamochan did provide a statement:

“PayPal, clearly feeling the heat from the pending litigation, thought that by simply giving Chris Moneymaker his money back, that things would end. They could not be more incorrect. Mr. Moneymaker will continue to consult with the Bensamochan Law Firm in proceeding with the class action on behalf of the thousands and thousands of people who have had their hard-earned money seized at will and with impunity by PayPal. This weak attempt to quell the litigation has only ignited a larger fire now. Mr. Moneymaker is committed to giving a voice to those without one, and the Bensamochan Firm is honored to be by his side for this.”

That means people may still join the cause. Anyone with a concern about confiscation of their funds by PayPal, should contact info@eblawfirm.us or call (818) 574-5740. A case is in process and will move forward in the coming weeks.