PayPal customers experienced access problems, and many were confused, when the company sent an email last week about the details of a class-action lawsuit it recently settled with Plaintiffs. Many users posting on discussion forums appeared to be unclear on whether they had to have experienced a monetary loss or had their account improperly frozen in order to file a claim. The settlement requires PayPal to pay out a total of $9.25 million into a settlement fund that must also pay for administrative costs and plaintiffs' lawyer fees.
Some users questioned why the notification was sent out via email (it was part of the settlement terms). One user who saw others posting about it on a discussion board said his mail server must have deleted the email, and another said she had assumed it was spam and deleted it without reading the notice.
Traffic to the site where users were directed to learn more and file a claim spiked late last week after the notices were sent, and many users complained they could not access the site. One user said she filed the claim electronically, but when she went to print the PDF file users are required to print, sign and return via mail, the form would not print, nor could she access the form again.
Traffic may rise again this week when advertisements about the settlement appear in USA Today, People magazine and Newsweek.
Members of the class are users who opened a PayPal account between October 1999 and January 2004. (http://digbig.com/4bmhy). Class members have a variety of ways to respond to the settlement. Attorney A.J. DeBartolomeo of Girard Gibbs & De Bartolomeo LLP explained that those class members who are not eligible for Dispute Resolution Claims (who are allowed to file a "Short Form" or "Long Form") may file a Statutory Damage Fund claim, regardless if they had a monetary loss or had their accounts frozen by PayPal. The $1 million Statutory Damage Fund will be divided equally among all persons who submit valid Statutory Damage Fund Claims.
Those who are eligible to file a Dispute Resolution Claim can file the Short Form and receive $50. Or they may file a Long Form. The Claims Administrator will consider for each Long From claimant the amount of damages claimed, the nature of the injury, the quality of proof and other factors. PayPal users who are eligible for Dispute Resolution Claims and who wish to file the Short form or Long Form must the meet one of the following criteria:
- You experienced an unauthorized or incorrect electronic transfer to or from your PayPal account;
- Your PayPal account was improperly restricted or access was improperly limited;
- You requested information from PayPal about an account restriction or limitation or unauthorized transfer and you did not receive a satisfactory response; and/or
- You experienced or reported an unsatisfactory result from a dispute with PayPal involving a chargeback, a refund, a buyer complaint, or PayPal’s Seller Protection Policy, Buyer Complaint Process and/or Buyer Protection Policy.
Customers who opened a PayPal account between October 1999 and January 2004 who do not fit in with one of the criteria listed above may still make a Statutory Damage Fund Claim (see the link on the bottom left navigation bar on the settlement Web site).
In addition to choosing between the Short Form Claim, the Long Form Claim, or the Statutory Damage Claim, PayPal users may choose to opt-out of the settlement, which they must do in writing. Those who meet the definition of the Settlement Class and do not opt-out will remain in the Settlement Class; they will be permanently barred from bringing against PayPal claims that arose prior to February 1, 2004. (See the Frequently Asked Questions section of the settlement Web site for further details.)
Class members have until October 23, 2004, to file a Short Form or Long Form claim, and members have until November 1 to file a Statutory Damage claim.
All PayPal customers should be wary of hoax emails and "phishing" attempts that may attempt to capitalize on confusion stemming from the settlement notice and subsequent publicity in order to gain access to users private, financial information or passwords.
Related Story
"PayPal Sends Users Notice of Class-Action Lawsuit Settlement," by Ina Steiner, AuctionBytes.com, July 30, 2004
http://www.auctionbytes.com/cab/abn/y04/m07/i30/s01
