Online sellers who have dealt with holds on their PayPal funds over the years are entitled to part of a $4 million class action lawsuit settlement. But in order to get their piece of the settlement, they have to go to a website not operated by PayPal and enter information that has the potential to put their PayPal accounts at risk.* If they do nothing, they will not receive any funds they may be entitled to.
*if the website is breached.
This morning's Newsflash has the latest details about the settlement, and as we noted, sellers have to enter their name, address, phone number, and the email address associated with their PayPal account on a form on a website set up by a claims administrator appointed by the court. (The website is registered privately - that means you can't use the WhoIs database to verify that the URL was set up by the settlement administrator.)
Experts warn that people should not hand out such information to anyone since it can put them at risk for an account takeover - many online sellers receive phishing emails looking for that information on a daily basis. The website does not provide information about how the data is stored, who has access to it, and what will happen to the database of user account information after the settlement.
The Claims Administrator is committed to maintaining the privacy of your personal information. With respect to the collection, use and disclosure of personal information, the Claims Administrator makes every effort to ensure compliance with applicable law, including, but not limited to, the Data Protection Act, 1998, the U.S. Privacy Act of 1974, the U.S. Paperwork Reduction Act of 1995, the US-EU Safe Harbor Privacy Principles and internal information quality guidelines. In connection with the claims administration process, you may be asked to provide certain information, including, but not limited to, name, postal address, telephone number and transactional account data. The information collected will be used solely for the purposes of the Settlement and the claims administration process, as governed by the Court.
Here's a copy of the email PayPal has been sending out to users this month:
NOTICE OF CLASS-ACTION SETTLEMENT.
THIS NOTICE MAY AFFECT YOUR RIGHTS. PLEASE READ IT CAREFULLY.
A settlement has been reached in a class action in which the plaintiffs allege, among other things, that PayPal improperly handled disputed transactions on PayPal accounts and improperly placed holds and reserves on accounts or closed or suspended accounts. Plaintiffs also allege that PayPal failed to provide annual error-resolution notices and monthly account statements under the Electronic Fund Transfer Act.
You are a member of the Settlement Class if you had an active PayPal account between April 19, 2006 and Nov. 5, 2015. Certain Settlement Class Members who had a hold or reserve placed on their account and/or who had their account closed or suspended by PayPal are eligible to receive a monetary payment upon submission of a valid claim form.
This notice summarizes the proposed settlement. For the precise terms and conditions of the settlement, please see the Settlement Agreement available at http://www.accountholdsettlement.com/ or by visiting the office of the Clerk of the Court for the United States District Court for the Northern District of California, 1301 Clay Street, Oakland, CA 94612, between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays.
PLEASE DO NOT TELEPHONE THE COURT OR THE COURT CLERK'S OFFICE TO INQUIRE ABOUT THIS SETTLEMENT OR THE CLAIM PROCESS.
When you initiate a claim on the website, you'll be asked two questions - and if you answer yes, you'll be asked to answer additional questions:
Question 1: Between April 19, 2006 and November 5, 2015, did you have a hold or reserve placed on your PayPal account?* (Yes / No)
Question 2: Between April 19, 2006 and November 5, 2015, was your PayPal account closed or suspended?* (Yes / No)
Question 3: If you answered “Yes” to Question 1, do you wish to submit a Basic Claim, which, if valid, will result in a fixed payment based on the amount and length of the longest hold or reserve placed on your account or to submit an Alternate Claim based on the amount of documented damages, up to $2,000? You may select either a Basic Claim or an Alternate Claim, but not both.*
Question 4: If you selected “Alternate Claim” or answered “Yes” to Question 2 and want to submit an Alternate Claim, please describe in the space provided below the basis for your Claim and please upload any supporting documentation. Your Claim will be evaluated by a neutral third party approved by the Court, based on the information you provide and the records of PayPal. You may be contacted for further information in support of your Claim.*
You can see how much money is at stake - we published a chart showing how much members of the class are entitled to (if they submit a claim) in today's Newsflash, available on the EcommerceBytes website