PayPal Downsizes, Lawsuits Much Harder for Disgruntled Customers

By Ed Silverstein October 29, 2012

PayPal, owned by eBay, is making it much harder for disgruntled consumers to sue the company.

In an update to the PayPal User Agreement, users will basically be able to submit claims against PayPal to binding and final arbitration.

Users may opt out of the arbitrate section of the agreement by Dec. 1, 2012. Otherwise, they can “pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and … will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis,” according to an e-mail recently sent to PayPal users.

The update to the agreement is effective Nov. 1, and is similar to what many other companies are doing to avoid costly jury trials. On Aug. 31, 2012, for instance, Microsoft told many of its customers it will be much harder to sue Microsoft or join in a class action lawsuit against the company.

Microsoft added a class action waiver and binding arbitration clause to its customer service agreement, the company said in August, TechZone360 reported.

In other recent company news, PayPal is cutting about 325 jobs in a company reorganization, according to a recent statement. The 325 employees are mostly in the product and technology business units. As part of the reorganization, PayPal will cut about 120 contractors, as well.

PayPal has over 117 million active accounts.

In addition, according to Reuters, the reorganization will have PayPal combining nine product-development groups into one.




Edited by Braden Becker

TechZone360 Contributor

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