"Taking PayPal To Court"
"Taking PayPal To Court"
By Bernd Schneider
For those whose claims against PayPal are below 5000 US dollars in value, it isn't difficult in principle to sue the company. And it doesn't have to cost much money.
Claims below 5000 US dollars can be brought to a Small Claims Court. One does not need a lawyer to take PayPal to a Small Claims Court, the proceedings are very affordable, and I have read posts of people who have won against PayPal in such courts without the assistance of a lawyer.
However, if you do want a lawyer, you can sue PayPal at a higher court. He may also be able to get a larger amount of damages, and he may agree to represent or consult you for a contingency fee (which means that he collects a payment from you only if you win).
You can claim not just the amount of money PayPal "restricted", but also expenses and damages. So, even if the principal amount is small, taking PayPal to a Small Claims Court may result in a financial compensation which covers not just the "restricted" original amount but also the effort it took you to recover your money (which may or may not be higher than the principal amount). You can claim lost-income damages for the time you were preoccupied with attempting to recover your money, and if you suffered a nervous breakdown, you can put related expenses on the bill as well.
Every US county has a Small Claims Court. They are under the responsibilities of the Justices of the Peace; so, if your local telephone directory doesn't have an entry for "Small Claims Court", check under "Justice of the Peace".
PayPal have their offices in Santa Clara County, California. You could proceed at a Small Claims Court in Santa Clara County, and PayPal would probably prefer that location. However, a suit can be filed not only in the county where the defendant is located, but also at a place where a service was performed, or was supposed to be performed. PayPal stress that they are not a bank, but an agent that delivers money from a sender to a recipient. If you have ever made a withdrawal from your PayPal account, a service chain has been established that reaches to the bank where you have the account to which you withdraw money from your PayPal account.
As a service has been performed at the county where you have your bank account, you can take PayPal to a Small Claims Court in the county where you reside, or, at least, where you have your bank account. This gives you a substantial advantage. If PayPal as defendant want to contest your case, they will have to send somebody.
You will need the following information when you file your suit: 1. Your name and address; 2. PayPal's name and address (I am not quite sure whether their corporation is PayPal, Inc. or Confinity, Inc.; they are known as PayPal, Inc. but the WHOIS listing for the domain PayPal.com shows as registrant Confinity, Inc.); 3. the principal amount and the amount of expenses and damages you want to sue for; 4. a presentation of your case (it would be good to have this in writing, as it will enhance your chances of winning, if only because the presentation is likely to be more precise); 5. documents that support your claim (mostly electronic messages exchanged between you and PayPal).
It will only cost a small amount to process your case at a Small Claims Court. If you win, PayPal will likely have to refund this fee as well.
When you file your case, you will first have to deal with the clerk of court. A decision will not be made at the time you file your suit. PayPal as defendant will have to be invited for a hearing. You or your lawyer must be present at the hearing. If you aren't (and aren't represented by a lawyer) your case will be dismissed. If PayPal do not show up, the likelihood that the court will decide in your favor in a default judgment is pretty high. Whether PayPal attend or not, you will not have to be aggressive to win. It will be sufficient to be polite.
You should bring all relevant documents to the hearing. This should include printouts of all your unanswered mails to PayPal, as this will prove that they are non-responsive to a negotiated settlement. That they do not answer mail on your complaints will likely speak in your favor.
