Consumer Alert: PayPal Changes Rules For Customers

PayPal new rulesPayPal recently announced a new Anti-Consumer Policy. And if you are a user who doesn?t like the new policy, you can?t just opt out online. You must do so via snail mail.

In its user agreement update, as of November 1, 2012, PayPal says users can no longer sue the company in court if something goes wrong with your account causing you to lose business or funds. Users will not be allowed to participate in class-action suits against the firm. PayPal wants members to agree to only resolve disputes through arbitration.

You can decide not to agree to these new terms by putting it in writing and mailing it postmarked no later than Dec. 1, to: Litigation Department, 2211 North First St., San Jose, Calif. 95131. Include your name, address, phone number and the email address you use to log in to PayPal. Sign the letter or it won?t be valid.

New PayPal users will have 30 days to opt out of arbitration after signing up for the service and should follow the same procedure.

If you opt out, you can still use PayPal?s services, but if you want to take the e-commerce site to court you can only file a suit in Santa Clara County, California, where PayPal is headquartered or Omaha, Nebraska, where its operations center is located.

There is one other option?you can still take the company to local small claims court in your city, but this limits the dollar amount you can seek.

PayPal, which is owned by eBay, is following the lead of its parent company. eBay sent its customers a similar notice in August. PayPal and eBay aren?t alone in making these legal moves. According to consumer experts, more and more companies are taking this route due, in part, to the Supreme Court validating the use of arbitration in consumer contracts in a 2011 ruling.