During that period, the company lost $9.7 million, or about 0.42 percent of the total amount of transactions through its service, due to fraud-related transactions. 30, 2001, for instance, $5.8 million was charged back to PayPal due to customers who disputed purchases with their credit card companies. In regulatory documents filed with the Securities and Exchange Commission, PayPal warned that while it had taken steps to reduce fraud, it still incurred "substantial losses" due to merchant and consumer fraud.ĭuring the nine months ended Sept. Several Web sites, including, have been set up to give voice to disaffected PayPal users. PayPal customers have repeatedly complained about how the company handles cases of suspected fraud. And state banking regulators in New York, California and Idaho have raised questions about whether PayPal operates an unauthorized banking service. Meanwhile, Louisiana has asked PayPal to cease offering its service to the state's residents until the company receives a license to transmit money from the state. The company is also involved in a patent dispute with Tumbleweed Communications, although that has not gone to the courts. A lawsuit alleging patent infringement filed earlier this month forced PayPal to delay its IPO by more than a week. The suit is only the latest legal trouble to befall the online payments company. "Under the guise of needing to protect consumers from fraud, they themselves are guilty of fraudulent abuse of their customers," Koff said.Ī PayPal representative declined to comment, citing the company's post-IPO quiet period. That can often take days or even weeks, customers charge. The result is that customers can't accept any more payments via PayPal, pay anyone through the service, or withdraw any of their money until PayPal clears the transaction. PayPal frequently locks customers' accounts if it suspects that fraud played a part in a transaction, even if the amount in doubt is a fraction of the total amount in an account, said Gail Koff, an attorney and founding partner of Jacoby & Meyers, which filed the lawsuit. The suit asks for an unspecified amount of damages. Prior results do not guarantee or predict a similar outcome with respect to any future matter.A class-action lawsuit has been filed against PayPal, days after the company's successful initial public offering.įiled Wednesday in California Superior Court in Santa Clara County, the suit charges PayPal with illegitimately restricting customers' access to their money. This may be considered Attorney Advertising in some jurisdictions. Its attorneys have established track records litigating securities cases in courts throughout the country and recovering losses on behalf of investors. Thornton Law Firm's securities attorneys are highly experienced in representing investors in recovering damages caused by violations of the securities laws. Thornton Law Firm is not currently representing a plaintiff who filed a complaint but is investigating the case on behalf of investors interested in being a lead plaintiff.įOR MORE INFORMATION: w ww./cases/PayPal Until certification occurs, investors are not represented by an attorney. If investors choose to take no action, they can remain an absent class member. Investors do not need to be a lead plaintiff in order to be a class member. A lead plaintiff acts on behalf of all other investor class members in managing the class action. Interested PayPal investors have until Octoto retain counsel and apply to be a lead plaintiff if they are interested to do so. Investors may also email or call 61.įOR MORE INFORMATION: The case alleges that PayPal and its senior executives made misleading statements to investors and failed to disclose that: (i) PayPal had deficient disclosure controls and procedures (ii) as a result, PayPal's business practices with respect to PayPal Credit remained non-compliant with applicable laws and regulations (iii) PayPal's practices regarding payment of interchange rates related to its debit cards were likewise non-compliant with applicable laws and regulations (iv) accordingly, PayPal's revenues derived from its PayPal Credit and debit card practices were in part the subject of improper conduct and thus unsustainable and (v) this subjected PayPal to an increased risk of regulatory investigation and enforcement. Investors who purchased PYPL stock or other securities between Februand Jmay contact the Thornton Law Firm's investor protection team by visiting for more information. The case is currently in the lead plaintiff stage. October 14, 2021) - The Thornton Law Firm alerts investors that a class action lawsuit has been filed on behalf of investors of PayPal Holdings, Inc. PAYPAL Investor Alert: Class Action Lawsuit Filedīoston, Massachusetts-(Newsfile Corp. Company Overview Our Team Our Commitment Success Stories Upcoming Conferences Careers.
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