PayPal accused of stealing users’ money in frozen accounts

If you’re a PayPal user – especially one in Africa – you’ve for sure experienced issues including withheld payments, locked accounts, and more. Well, the payments platform is now facing a class-action lawsuit – as reported by ArsTechnica.

In the lawsuit, the company is accused of freezing users accounts without offering any explanations, committing conversion, breach of contract, and unjust enrichment.

According to Bloomberg, two residents of California plus a Chicago businessman have claimed in the lawsuit that PayPal’s hold on the money amounts to an unlawful seizure. The three are proposing a class-action lawsuit on behalf of all account holders who have had their money placed on hold.

Last year, Chris Moneymaker tweeted on the same issue. He asked anyone affected by a similar situation to join in on the law suit. Bloomberg reports that less than 10 days after tweeting the threat, PayPal “mysteriously returned his money”.

It will be interesting to see how the issue pans out. As it will for sure bring to light a discussion Kenyans – and Africans in general – have had about the service for a while now.

Kenyan PayPal users will remember the morning of July 19th 2018 when almost all users who had linked their accounts to Safaricom M-Pesa for easier deposit and withdrawal woke up to locked accounts. Users were told their recent activity violated the company’s agreements, and that they could no longer access or use the service because of fraud. It made no sense.

PayPal Blocks M-Pesa Linked Accounts Over Fraud

This issue was later on solved with no official communication from PayPal whatsoever. No apologies sent out to affected users or businesses.

Two years after that issue, in March of 2020, there was a whole two weeks period when Kenyan users couldn’t receive Two Factor Authentication codes. Attempts to reach PayPal not only showed just how hard it is to get customer service, but how less important this market was for them.

We’ve already discussed the struggles Kenyans face when using PayPal on our 24Bit Podcast. You should take a listen.

24Bit Podcast: Does PayPal care about Kenyan users:

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