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Paypal Slips 'No Class Action' Clause Into Policy Update

timothy posted about a year and a half ago | from the real-class-actiony-paypal-real-class-actiony dept.

Businesses 294

First time accepted submitter Guru80 writes "PayPal recently posted a new Policy Update which includes changes to the PayPal User Agreement. The update to the User Agreement is effective November 1, 2012 and contains several changes, including changes that affect how claims you and PayPal have against each other are resolved. You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis. With so many privacy policies changing to include such wording, does it really hold any weight if some obscure and buried opt-out option isn't checked?"

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294 comments

Legal? (1)

Anonymous Coward | about a year and a half ago | (#41694605)

Could this possibly hold up in court? Isn't it our right to sue?

Re:Legal? (3, Informative)

jellomizer (103300) | about a year and a half ago | (#41694811)

Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.

Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.

Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.

Re:Legal? (5, Insightful)

qbast (1265706) | about a year and a half ago | (#41694971)

Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.

The point is not to give victims money, but to force company to change its illegal practices. And as usual with companies, best incentive is money and lots of it.

Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.

Well, if things reached the point where class action is needed, then obviously company did not make things better earlier.

Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.

Very funny. Almost nobody will sue separately, because bankrupting yourself on lawyer fees is not exactly rational thing to do when company cheated you out of $100.

Re:Legal? (4, Insightful)

afidel (530433) | about a year and a half ago | (#41695261)

If a company cheated you out of $100 just go to small claims court, no lawyer needed and in most states no lawyers allowed. Of course filing fees and your time make small claims court mostly a waste for $100, but for say $500 it's an option.

Re:Legal? (3, Insightful)

Anonymous Coward | about a year and a half ago | (#41695443)

Hi! Welcome to the real world, where people don't have an extra 40 hours of time to pursue a $500 claim.

Re:Legal? (0)

afidel (530433) | about a year and a half ago | (#41695549)

Why do you think it takes 40 hours? Go down to court, file the paperwork, should take 30 minutes then show up on your appointed date and time which should take under 4 hours. Like I said for $100 it doesn't make sense but for around $500 it makes sense for anyone making under ~$250k a year which is almost everyone.

Re:Legal? (0)

Anonymous Coward | about a year and a half ago | (#41695827)

Hi, welcome to the real world where it doesn't take 40 hours to file a small claim.

Re:Legal? (1)

tnk1 (899206) | about a year and a half ago | (#41695525)

So I am curious, who would a company send to small claims court, if not one of their lawyers? It's not like they're going to send the CEO...

Re:Legal? (1)

afidel (530433) | about a year and a half ago | (#41695631)

Generally a low level officer, aka store or regional manager for a retail outlet or the equivalent for other business types. The courts will generally be more favorable towards the corporation if the person representing them had some part in the dispute with the customer so they can offer some insight into what the corporation has done to avoid the case taking the courts time.

Re:Legal? (2)

no-body (127863) | about a year and a half ago | (#41695573)

BS! - you live in Arizona and want so sue a NY company in small claims court there for $ 100 or $ 500.

AFAIK, you'll have to sue in the same state's/county small claims court.

Also - my experience with a big wig Co in small claims court - their attorneys did not appear, known to Court Clerk, they PHONED IN and settled!
But I never got the court/process cost refunded because the Co. closed their local branch.

Re:Legal? (2)

Spiked_Three (626260) | about a year and a half ago | (#41695811)

You have to sue in the state where the crime/offense occurred. That is not where it was mailed from, it is where it was ordered and received.

Reality is the NY company will not show up, get a default judgement (IF you know the proper way to ask for it, otherwise the judge will say there is nothing he can do if the defendant doesn't show up) and nothing will happen. Maybe, if you are lucky they will pay an in state lawyer who will show up, and request continuances until you do not show up, the then default goes against you.

The entire system is ALWAYS rigged for businesses and lawyers, period.

If by some miniscule chance you and the company get before a judge, he will totally ignore any resemblance to law and always side with the company. If you wanted to argue legal facts for real, you would not have gone to small claims court in the first place, but instead paid a lot for a lawyer and demanded a real trial!

Re:Legal? (0)

Anonymous Coward | about a year and a half ago | (#41695005)

The victims often get nothing, and instead their cut goes to a charity.

Re:Legal? (5, Interesting)

Anonymous Coward | about a year and a half ago | (#41695095)

Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.

Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change.

Non-Class actions where each victim has a separate suite can be more profitable to the victim, and causes the company to change before such suits become more common.

You Sir have a real problem understanding the rationale for a class action. It is not there to make the victims milionaires. It is there as a way to inflict punitive damages to a corporation.
Without class actions it becomes almost impossible for a single guy to "fight" against the wrong doings of a corporation. Think about the tabacco industry and where we would be without class actions suits against them. Taking away this tool was one of the most brain dead decisions the justice system ever made.
Those who are against class action as a puntive tool against corporations are either idiots (genuine idiots) or bought off by corporations.

Re:Legal? (-1)

Anonymous Coward | about a year and a half ago | (#41695111)

"most of them are just lawyers grabbing for money"
fucking die you cunt

Re:Legal? (0)

Anonymous Coward | about a year and a half ago | (#41695201)

Thank you Paypal, for your opinion on the new one-way clause in your agreement, which is nicely hidden.

Class action suites make more money for the lawyers, than the plaintiffs, but are effective punishment for the misdeeds of the corporation.

Paypal seems to need to be inoculated against the disease of customer dissatisfaction. What are they planning to do to their customer base, which they're concerned will result in a class-action suit?

Re:Legal? (0)

Anonymous Coward | about a year and a half ago | (#41695345)

Class Action Lawsuits are often a big scam by the lawyers for them to make millions of dollars. While the "victims" (A mix of people who were actually a victim, and people who seem to meet the criteria but never really had a problem, but wants a few bucks) get their check for ten bucks.

Yes there are some good Class Actions out there, but most of them are just lawyers grabbing for money. After all is said and done. The company lost a lot of money, which could have gone to making things better earlier, and new jobs. And the real victims get joke change...

I would wholeheartedly agree with the value-add of class-action lawsuits here, but please do not sit here and blindly assume that a company that didn't spend money on litigation would have somehow spent it on making their (obviously shitty) product better or safer. Chances are it would have been absorbed into executive-level bonuses, not re-distributed into the better of the company or product.

Re:Legal? (5, Informative)

AmiMoJo (196126) | about a year and a half ago | (#41695351)

That doesn't make it right to ban them though.

Frankly I'm amazed the law in the US even allows them to do this. In the UK contracts cannot take away your legal rights, including the right to take legal action.

Re:Legal? (4, Insightful)

Shagg (99693) | about a year and a half ago | (#41695675)

The US government is a wholly owned subsidiary of the US corporations. Are you really that amazed?

Re:Legal? (3, Informative)

Nikker (749551) | about a year and a half ago | (#41695847)

Sounds great.

I guess the first step is to call customer service, they give you the run around and basically laugh you off.

Second step is to ask for a manager who you never really get to speak to but maybe get to leave a voice mail or email to some generic mail box that in turn tells you the same thing but more cordially of course.

Now you either just give up because you've spent 10+ hrs time on hold and 2+ hrs on the phone trying to get transferred to the "Right Person(TM)" or you try to take it to the next step, Corporate!

They send you a canned message citing policy and some obscure paragraph in the 100 page agreement you clicked "Agree" to.

Even if you still believe you are right now you file a claim in small claims court. You get sent a library of congress sized package outlining why they believe they are right and you are wrong. You feel over whelmed and retain a lawyer to see the best course of action for a small fee of a couple grand. The lawyer says it will also cost an additional fee to read the mountain of paper sent and no guarantee but the outlook could be good!

2 months to the court date just to find out they need another court date because your TOS has changed (you did agree to the new terms last time you logged back in right?). All said and done 2 years later you may get an agreement of %50 of you original claim or settle out of court for %75 if you sign away all your future claim rights. Mean while the lawyer gets to trump up his fees and gets reimbursed 100% and you get $50 of your $100 claim.

So you think it's more profitable to sue individually? Please explain!

Re:Legal? (4, Insightful)

jythie (914043) | about a year and a half ago | (#41695881)

Well, yes and no.

I agree that the lawyers often take advantage of claimants, but this is due to the victims not really understanding the effect of the suit.

Class action lawsuits are not really designed to compensate the victim in the first place, they just punish the perpetrator. They act as an almost private DoJ.. many of our laws are written in such a way that the police/DoJ/regulators have no authority to actually go after illegal acts, with the only redress being a lawsuit.... I suspect it was supposed to be part of the American 'fate in your own hands' mentality, but really it is a copout of the justice system since really they should be the ones enforcing the laws, not groups of citizens and a team of very hopeful lawyers.

They do however at least provide SOME counterbalance. Individual victims rarely have the resources to take on companies with dedicated legal teams. Many companies are trying to slip this kind of language into their agreements because unlike individual suits or the DoJ, class action lawsuits actually represent potential legal and economic consequences for poor behavior. With that tool taken away, their incentive to behave is significantly decreased.. esp in cases like paypal which have the weight to be a near monopoly in their domain.... and given the sketchy things paypal has been caught doing (such as simply keeping merchant's money for reasons they are not required to explain) I can see why they would want to shut this avenue down. Now all that will be left is criminal fraud or other violations.. which given how agreeable they have been at cutting money off from people the DoJ does not like but doesn't have a legal case against.. well.. I doubt they are going to be charged any time soon.

Re:Legal? (5, Informative)

Anonymous Coward | about a year and a half ago | (#41694859)

Could this possibly hold up in court? Isn't it our right to sue?

The supreme court ruled in April 2011 that not only can they require you to agree to not form a class action, but they can also require you to mediate all claims in forced binding arbitration (basically, a parallel court system bought and sold by corporations).

It was a 5-4 decision, and pretty much every agreement is now including this boilerplate legal text. They don't even HAVE to offer an opt-out. AT&T started it, followed up by all cell phone carriers, Sony, Microsoft, Ebay, etc etc etc.

The mere fact that the decision was split shows that even the justices don't know what rights there ought to be, and, unfortunately, the opinion of 5 of them means that corporations now have the right to collude against the consumer. After all, if everyone does it, the consumer has no choice.

Re:Legal? (1)

Savage-Rabbit (308260) | about a year and a half ago | (#41695189)

Could this possibly hold up in court? Isn't it our right to sue?

The supreme court ruled in April 2011 that not only can they require you to agree to not form a class action, but they can also require you to mediate all claims in forced binding arbitration (basically, a parallel court system bought and sold by corporations).

It was a 5-4 decision, and pretty much every agreement is now including this boilerplate legal text. They don't even HAVE to offer an opt-out. AT&T started it, followed up by all cell phone carriers, Sony, Microsoft, Ebay, etc etc etc.

The mere fact that the decision was split shows that even the justices don't know what rights there ought to be, and, unfortunately, the opinion of 5 of them means that corporations now have the right to collude against the consumer. After all, if everyone does it, the consumer has no choice.

Let me guess... Paypal gets to choose the arbitrator?

Re:Legal? (1)

Anonymous Coward | about a year and a half ago | (#41695713)

You cannot sign away your legal rights except for some very specific reasons. Like joining the military, jail time, company secrets, etc. This is a perfect example of an unconscionable clause to a contract. That is, one no one who knew what was going on would ever sign this contract if they had another choice. It would be like if you went to buy a car and had to sign something saying you'd only buy gas/service/parts/etc from the dealership or they have the right to take your car back, and suddenly all dealerships did it.

The supreme court didn't rule on whether or not it was conscionable, they just ruled on whether or not it was enforceable. There's actually NOTHING stopping you from a class action against them anyway, because you can terminate the contract at any time. But if you intend to do business with them in the future, you probably don't want to do that.

Re:Legal? (5, Informative)

afidel (530433) | about a year and a half ago | (#41694961)

Yes, in both AT&T Mobility LLC v. Conception and CompuCredit Corp. v. Greenwood the court has reinforced that you may enter into a contract which gives away your right to a jury of your peers for civil matters. Only in cases of outright fraud, either in the creation of the agreement or in the arbitration process will the courts intervene.

Re:Legal? (0)

Anonymous Coward | about a year and a half ago | (#41695015)

*IANAL* of course.

Not everything written in a cout agreement will hold up in court, if/when tested. For example, you can't write an agreement that expressly violates laws. In particular, the purpose of class action suits is exactly to allow group action where individual "wrongs" are not large enough to prosecute, but combined are sufficiently big. Trying to circumvent the law the way PayPal is doing is by itself probably a good ground for a class action suit (but got to wait until some actual harm is done, afaik) :)

Re:Legal? (1)

Penguinisto (415985) | about a year and a half ago | (#41695023)

PayPal's time is passing anyway.

Bank Of America had a commercial last night proclaiming they have the same money-passing capabilities. There's also PopMoney [popmoney.com] , which has just started up and is signing up banks left, right, and sidewise, so they can integrate the same functionality into their own services (and apparently it allows you to use it even w/o your bank participating).

I'm guessing that eventually, aside from eBay, PayPal will eventually become obsolete.

Re:Legal? (1)

tnk1 (899206) | about a year and a half ago | (#41695597)

Obsolete? Probably not, since they are just duplicating it's functionality. Out of business due to competition? Quite possibly, if PayPal's service cannot compete due to their terms.

On the other hand, do we think that these other entities are not also going to have to deal with the same problems that PayPal has? In what way would they deal with the same problems differently?

Re:Legal? (1)

Penguinisto (415985) | about a year and a half ago | (#41695753)

Well for one, as banks they're a bit more regulated...

But I do see your point as far as facing similar problems.

Re:Legal? (3, Informative)

Mashiki (184564) | about a year and a half ago | (#41695091)

Could this possibly hold up in court? Isn't it our right to sue?

This isn't legal in the various provinces/territories of Canada. Each has their own CPA(consumer protection act), but each act pretty much has a section that says you can not be forced to waive any legal right.

Furthering the notions EULAs are a joke (4, Insightful)

GoodNewsJimDotCom (2244874) | about a year and a half ago | (#41694607)

EULA: You cannot sue us for any reason.

Agree to use our product.

Re:Furthering the notions EULAs are a joke (3, Insightful)

GoodNewsJimDotCom (2244874) | about a year and a half ago | (#41694649)

All kidding aside, anyone notice how snarky it was for ebay to not call itself an online auction? If ebay was an auction site, it would have had to do so much localization because it'd be sued in every state and county with different rules for auctions. Also Paypal isn't a bank, so it doesn't have to deal with banking regulations.

Re:Furthering the notions EULAs are a joke (0)

Anonymous Coward | about a year and a half ago | (#41695601)

snarky

That word doesn't mean what you think it means.

Banks do this too (0)

Anonymous Coward | about a year and a half ago | (#41694611)

but they still get sued...

Anyone find out how to opt out? (0)

Anonymous Coward | about a year and a half ago | (#41694653)

Anyone find out how to opt out? I sent in an email asking how last week but obviously haven't gotten a response.

Re:Anyone find out how to opt out? (4, Informative)

X0563511 (793323) | about a year and a half ago | (#41694815)

Opt-Out Procedure.

You can choose to reject this Agreement to Arbitrate ("opt out") by mailing us a written opt-out notice ("Opt-Out Notice"). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131.

The Opt-Out Notice must state that you do not agree to this Agreement to Arbitrate and must include your name, address, phone number, and the email address(es) used to log in to the PayPal account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of the User Agreement, including all other provisions of Section 14 (Disputes with PayPal), will continue to apply. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.

Re:Anyone find out how to opt out? (5, Insightful)

penix1 (722987) | about a year and a half ago | (#41695513)

You must sign the Opt-Out Notice for it to be effective.This procedure is the only way you can opt out of the Agreement to Arbitrate.

It's interesting that PayPal can change the agreement unilaterally without a signed statement but the user must provide a signed statement to get out of their unilateral change.

So since the courts have already decided that corporations can unilaterally change these agreements does that same reasoning extend to users changing them unilaterally? So if I don't agree to section 1.4 I can simply rewrite it to suit me and send a notice to the company stating they can opt out of this change only in the next month in signed statement. Cool!

Furthermore (3, Funny)

ThatsNotPudding (1045640) | about a year and a half ago | (#41695805)

"Lastly, the agreement must be accompanied by six Unobtainums (TM) breakfast cereal boxtops (15 lb. boxes only), each featuring a Notary Public seal from the Third Bank of Neptune. The agreement must have been written on parchment during the reign of Charlemagne."

Expect more frozen accounts for no reason (0)

Anonymous Coward | about a year and a half ago | (#41694657)

Paypal is a fucking criminal organization!

But can you opt out. (1)

gurps_npc (621217) | about a year and a half ago | (#41694677)

Article/poster should discuss how to opt out and what if any, the consequences are.

Re:But can you opt out. (0)

Anonymous Coward | about a year and a half ago | (#41694835)

Or... you could have found it yourself, posted that info, and earner rich, chunky karma points for getting a Score: 5, Insightful. Now you've lost out, because even if you do, you'd be seen only as doing it because some AC suggested it, making it not nearly as cool. Karma's a bitch, ain't it?

Incidentally, anyone know of any case where a judge refused to let a person or group make a lawsuit class-action because someone made binding arbitration a part of an agreement or term or condition of use? Because I don't... although IANAL BAM. Hmm... Class Action... I wonder if anyone's used that one yet, it's easy to imagine a porn website with a name like that... www.classaction.com. Maybe lawyer porn. I'd just check, but I'm at work and you can't visit porn sites at work anymore... they still let you visit slashdot though, and that would be kind of a cool name for a porn site too.

Re:But can you opt out. (0)

Anonymous Coward | about a year and a half ago | (#41695143)

Spoken like someone who contributes nothing to the conversation.

Federal Arbitration Act (0)

Anonymous Coward | about a year and a half ago | (#41694689)

According the the Supreme Court ... yes

Is it wrong ... yes

How do we fix it?
Alter the Federal Arbitration Act

http://www.nytimes.com/2011/04/28/business/28bizcourt.html?_r=0

Re:Federal Arbitration Act (1)

MickyTheIdiot (1032226) | about a year and a half ago | (#41695041)

Yeah. An uphill battle with millions of lobbying dollars coming at you like flak towards a B52.

For laws that are good for people instead of artificial people there has to be a huge change in direction first.

I suspect it will not hold up if tested (1)

ugen (93902) | about a year and a half ago | (#41694727)

*IANAL* of course.

Not everything written in an agreement will hold up in court, if/when tested. For example, you can't write an agreement that expressly violates laws. In particular, the purpose of class action suits is exactly to allow group action where individual "wrongs" are not large enough to prosecute, but combined are sufficiently big. Trying to circumvent the law the way PayPal is doing is by itself probably a good ground for a class action suit (but got to wait until some actual harm is done, afaik) :)

Re:I suspect it will not hold up if tested (0)

Anonymous Coward | about a year and a half ago | (#41694775)

Except that courts held up for instance AT&T forcing arbitration and not allowing class actions.. that's why all the companies are putting "No class action" clauses in their use agreements now.

Re:I suspect it will not hold up if tested (1)

GoodNewsJimDotCom (2244874) | about a year and a half ago | (#41694799)

*not a lawyer either* either From what I've heard, they're putting these clauses in because of a recent occurrence in law that allows them. I'm not sure if it is a new law, or a new interpretation of the law by Federal courts.

Re:I suspect it will not hold up if tested (1)

MickyTheIdiot (1032226) | about a year and a half ago | (#41695083)

It's an out of control supreme court handing new powers to corporations while taking the rights of individuals away.

I am not a lawyer either, but it sure seems like a due process violation to me.

Cue the people that say "due process" only applies to criminal trials.. I know.

Re:I suspect it will not hold up if tested (0)

Anonymous Coward | about a year and a half ago | (#41695151)

There was a California Supreme Court precedent, Discover Bank v. Superior Court, 36 Cal. 4th 148, 113 P. 3d 1100 (2005), that held that arbitration agreements for class actions were unconscionable under California law. That decision was struck down by the Supreme Court of the US on April 27 2011 as it was preempted by the Federal Arbitration Act. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) [supremecourt.gov]

Here Come The Supremes. (0)

Anonymous Coward | about a year and a half ago | (#41694753)

I have serious doubts that any agreement which lessens a parties status in law can stand up to the Federal Courts system. In essence your rights are your rights even when you don't want them to be. The notion that some people might be limited in relation to redress of a grievance in a court of law offends our constitution.

Re:Here Come The Supremes. (1)

Em Adespoton (792954) | about a year and a half ago | (#41695213)

I have serious doubts that any agreement which lessens a parties status in law can stand up to the Federal Courts system. In essence your rights are your rights even when you don't want them to be. The notion that some people might be limited in relation to redress of a grievance in a court of law offends our constitution.

Your rights include the right to make binding contracts. Any case that stays in civil court abides by contract law, which is why the AT&T case was upheld. If Paypal was charged/found to be in violation of criminal law, the government would step in, and a class action would not be needed. Thus, the window for where someone could argue that a class action suit is their right is extremely limited, especially for small claims (which is where class actions are effective).

In the case of Paypal, a lawyer would do much better to pursue interstate commerce infractions, banking regulations, or outright fraud laws than to attempt a class action contract suit.

Then again, IANAL, and this view obviously holds no water in many countries (especially those where class action suits aren't legal in the first place).

Disturbing trend (2)

Black Parrot (19622) | about a year and a half ago | (#41694777)

We need to start pressuring Congress to create a law stating that access to the courts is a fundamental right that cannot be denied as the terms of a contract.

Re:Disturbing trend (5, Insightful)

timeOday (582209) | about a year and a half ago | (#41695003)

It is absurdly out of hand. I noticed the other day when my 14-year-old fired up the XBox it hit him with another "Notice of Change to EULA" (which he of course ignored).

The whole libertarian notion of mutual consent has become a complete farce. How could we have known 6 years ago when we bought this thing how much to pay for it, based on changes they would make far in the future, churned out by a team of lawyers so productive we'd never even have time to read it, even if we had the legal background to do so? Again, this is a legal sham.

Re:Disturbing trend (1)

jgtg32a (1173373) | about a year and a half ago | (#41695307)

IANAL but if he's under 18 he cannot agree to a legal contract

Re:Disturbing trend (0)

Anonymous Coward | about a year and a half ago | (#41695797)

That is a big misunderstanding, but minors actually CAN agree to legal contracts. It is only in cases dealing with minimum necessities (food, shelter, heat, etc.), other areas carved out by law (e.g. contracts to join the military, or employment contracts with fair terms) OR when the minor continues to receive the benefits of the contract (i.e. you cannot avoid a contract and keep the benefits, both parties have to be restored as if nothing happened). In the case of Xbox LIVE, there is a good argument that he is bound as long as he uses it to play online because he continues to receive the benefit of the contract, which means Microsoft gets to keep the money too.

Re:Disturbing trend (1)

Zlotnick (74376) | about a year and a half ago | (#41695221)

It's in the 7th Amendment. Getting the powers that be to agree to the terms of the Constitution and its amendments seems to be the issue at hand.

Re:Disturbing trend (0)

Anonymous Coward | about a year and a half ago | (#41695671)

Good luck with that, it was Congress that passed the Federal Arbitration Act...

Re:Disturbing trend (2)

Hatta (162192) | about a year and a half ago | (#41695819)

You realize that Congress is wholly owned by the corporations that benefit from these arbitration clauses, right? Congress will be no help.

No, what we really need is people to extract vigilante justice from the executives of the corporations that have wronged them. A few dead CEOs and they'll be begging to allow us access to the courts.

Opt out? Oh yeah (1)

Mephistophocles (930357) | about a year and a half ago | (#41694817)

Unless you opt out...

Best option IMHO is to opt out - as in, completely. As in, don't use Paypal, ever, for anything. There are alternatives.

Re:Opt out? Oh yeah (0)

Anonymous Coward | about a year and a half ago | (#41694883)

What are the alternatives?

Re:Opt out? Oh yeah (0)

Anonymous Coward | about a year and a half ago | (#41695021)

AmazonPayments, of course.

Re:Opt out? Oh yeah (2)

Arancaytar (966377) | about a year and a half ago | (#41695253)

In theory, Google Wallet, Moneybookers, Amazon Payments, others. In practice, most online stores support only Paypal.

(Heh. I recall making my first internet purchases around 2004-2005, and it was hell to even get Paypal support back then. Even stores that used it often required you to combine it with a credit card rather than using the account balance or debiting a bank account. Since the idea of Paypal was to avoid credit cards, that was kinda self-defeating.)

Re:Opt out? Oh yeah (1)

Em Adespoton (792954) | about a year and a half ago | (#41695313)

What are the alternatives?

Cheques, e-cheques (my bank enables me to do paypal-like monetary exchange with anyone I want), money order, bitcoin, stored value cards, credit cards, debit cards, gift cards/codes, barter, etc....

There are many alternatives, and this is just a small list of ones that don't duplicate the Paypal business/service model (there are many of those, but they all have the same problems as Paypal so I won't mention them).

Re:Opt out? Oh yeah (0)

Anonymous Coward | about a year and a half ago | (#41695463)

What are the alternatives?

It's questions like this that scare the shit out of me, as it implies that we have generations of ignorant consumers who honestly believe the only way to pay someone online is to use Paypal, the only way to buy or listen to music is through iTunes, and the only way to communicate with family is through Facebook.

I wonder exactly what the fuck you did with your life before any of these services existed, but you probably don't even remember when high-speed internet wasn't available on every street corner for free either.

"Slipped In?" Didn't you get the memo? (3, Informative)

timeOday (582209) | about a year and a half ago | (#41694847)

No, seriously. Here is the email I received from PayPal on 10/10/2012 at 1am:

Notice of Policy Updates Dear xxx xxxx, PayPal recently posted a new Policy Update which includes changes to the PayPal User Agreement. The update to the User Agreement is effective November 1, 2012 and contains several changes, including changes that affect how claims you and PayPal have against each other are resolved. You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis. You can view this Policy Update by logging in to your PayPal account. To log in to your account, go to https://www.paypal.com/ [paypal.com] and enter your member log in information. Once you are logged in, look at the Notifications section on the top right side of the page for the latest Policy Updates. We encourage you to review the Policy Update to familiarize yourself with all of the changes that have been made.

Not that I am defending it.

Re:"Slipped In?" Didn't you get the memo? (1)

game kid (805301) | about a year and a half ago | (#41695019)

Yeah. My copy of the notice arrived a day earlier, even. As with Valve's change [slashdot.org] and eBay's [slashdot.org] , I thought they already had a no-CA clause anyway. All the Cool Kids, EULAs=sign away your first born and their virginity, class actions=free coupons for their service, et cetera.

So meh.

And the hits just keep on comin'... (0)

Anonymous Coward | about a year and a half ago | (#41694849)

What a ride !!!
The US has gone from having one of the most exemplary consumer protection laws framework to one which basically fucks over the consumer 100% of the time.
USA uber alles.

payouts (0)

Anonymous Coward | about a year and a half ago | (#41694869)

I received the same thing from Amex the other day.
But the interesting thing is, suppose there's a class-action suit, when was the last time a group has received anything significant?
Amazon gave everyone $1.34 credit towards the customer's next purchase AT amazon.com.
Ticketmaster did the same, but around ~$1.00. Again, only if you buy more tickets through Ticketmaster.

Methinks end-user gets screwed anyways. Only ones who win are lawyers.

What is needed (1)

ewibble (1655195) | about a year and a half ago | (#41694875)

A Class action should be raised against this clause! Seeking punitive damages for even putting something like this in a contract.

Binding Arbitraton is legalese for (1)

WOOFYGOOFY (1334993) | about a year and a half ago | (#41694889)

Binding Arbitration is contract legalese for "meet our FOAF, the arbitrator...".

Think about it. Who is the arbitrator and who does he / she want to please / not piss off? Whose circle does he / she run in? Who is in a position to provide work / favors / introductions / etc. for him or her? Who does he or she identify with? The whole science of jury selection that lawyers apply them to so assiduously is based on the answer to those types of questions. And yet in "binding arbitration" you're being "paranoid" and "unreasonable" if you ask them. Oh, and you have no choice. Yeah, that's fair. Paypal effectively excludes itself from our centuries old year old legal system and does what it wants.

PayPal is guaranteed that *most* customers will not not select PayPal on account of this contract change. The only blow back they'll ever feel is if , for decades the most outrageous shit goes down under the name of "binding arbitration" that finally even the type of regressive reactionary Congress we have is forced to DO something about it.

What this means is you shouldn't base anything important on the allegedly contractually obligated behavior of PayPal. Be ready to walk away and be able to walk away.

And yes, I DO understand the deleterious effects frivolous lawsuits have on companies; see my posts under WoofyGoofy->Software Patents for details.

Binding arbitration.

Re:Binding Arbitraton is legalese for (0)

Anonymous Coward | about a year and a half ago | (#41695247)

Blame congress, they passed the Federal Arbitration Act that "reflects a liberal federal policy favoring arbitration."

the reality is that (2)

nimbius (983462) | about a year and a half ago | (#41694915)

most major multinational corporations preserve the tradition of arbitration as your only means of recourse as theyve found the courts rule far too often in the favour of the users. Court time is reserved strictly for corporations to battle other corporations for control of consumers but once that control is entrenched? your arbitrator should you elect to meet with one will likely be from a limited pool of closely guarded individuals with close ties to the corporations for whom they arbitrate. Your ruling, statements, and even the case itself will remain entirely confidential with rarely any record of it transpiring. Most importantly, Arbitration allows a corporation to remain blameless. Never having admitted fault, they secure their public image and in turn their investors confidence as arbitration amounts to nothing more than a kangaroo court.

How to opt out (5, Informative)

bwcook0 (995211) | about a year and a half ago | (#41694935)

Opt-Out Procedure. You can choose to reject this Agreement to Arbitrate ("opt out") by mailing us a written opt-out notice ("Opt-Out Notice"). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131. The Opt-Out Notice must state that you do not agree to this Agreement to Arbitrate and must include your name, address, phone number, and the email address(es) used to log in to the PayPal account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of the User Agreement, including all other provisions of Section 14 (Disputes with PayPal), will continue to apply. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.

Collective Power vs Paypal (1)

ohnocitizen (1951674) | about a year and a half ago | (#41694945)

Here is where collective power would be of use. On the market side, we can exert pressure on paypal by making efforts to drive their customers to the competition (and reaching out to the competition to help them highlight their lack of this phrase). This approach does require there is actual viable competition, and that they don't pull the same crap (so in many markets it wouldn't be effective).

The second side is government. This is where regulation shines! Let's lobby Congress (and hell, local government) to pass laws forbidding private arbitration as a binding substitute for lawsuits. Let's use the power of the law to slap Paypal down and say "no, you are NOT allowed to do this to your customers".

But there *IS* that opt-out exception (3, Insightful)

macraig (621737) | about a year and a half ago | (#41694949)

This is OLD news: the announcement from PayPal went out over a month ago, and I mailed a signed opt-out declaration back to Paypal myself more than four weeks ago.

More important is that fact that Paypal actually had the decency - ??? - to include the opt-out exception in the first place. Do you have any idea how pervasive these clauses are now? ALL the corporate kids are doing it. If it's a business that provides a service and uses one-to-many type contracts - service agreements, terms of service, etc. - to establish the service, then you can bet such a clause is imminent if not already present. Valve added one months ago, AT&T did the same before PayPal, etc. EVERY service agreement will have one by the end of this year.

It's all thanks to yet another corporate-friendly ruling last year from the same Supreme Court that gave us the Citizens United ruling and allowed the upcoming election cycle to be fully bought.

its all downhill from here (1)

jest3r (458429) | about a year and a half ago | (#41694955)

Gone are the days when companies invested in bettering their products and protecting their customers.

It's now cheaper to invest in lawyers and better contracts, at which point these companies can continue to provide sub-par products or customer service with no ill consequence.

PayPal .. I use them everyday with no complaints ... heck I even like the product ... but with this latest update it reads like they are preparing for armageddon ... virtually every change leaves the customer worse off than before ...

Ranting a bit ... products are manufactured to fail ... customer service is designed to exhaust you ... contracts are designed to cheat you ... yet we keep pouring money into this stuff ...

 

Re:its all downhill from here (1)

shentino (1139071) | about a year and a half ago | (#41695611)

What choice do we have when they all gang up on us?

Companies love being in bed with each other.

PayPal... (0)

Anonymous Coward | about a year and a half ago | (#41694963)

"The world's best-loved way to pay and get paid."
Why would the best-loved way need a clause like that?

stupid stuff like this is why.... (0)

Anonymous Coward | about a year and a half ago | (#41694973)

I stopped using paypal about 3 years ago.

You can actually opt out? Yay! (2)

Arancaytar (966377) | about a year and a half ago | (#41694983)

How is that even considered evil?

Hm, let's check how to do this...

You can choose to reject this Agreement to Arbitrate ("opt out") by mailing us a written opt-out notice ("Opt-Out Notice"). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131.

The Opt-Out Notice must state that you do not agree to this Agreement to Arbitrate and must include your name, address, phone number, and the email address(es) used to log in to the PayPal account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of the User Agreement, including all other provisions of Section 14 (Disputes with PayPal), will continue to apply. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.

... yeah, never mind. I get it.

At least you don't have to deliver your opt-out notice in person and wrestle a grizzly to get inside their offices.

Re:You can actually opt out? Yay! (3, Funny)

dkleinsc (563838) | about a year and a half ago | (#41695081)

At least you don't have to deliver your opt-out notice in person and wrestle a grizzly to get inside their offices.

That's a fantastic idea. We'll be back with another contract update soon.

Thanks,
PayPal legal department

I Hope (0)

Anonymous Coward | about a year and a half ago | (#41695053)

I hope opting out means they will permanently cancel my paypal account.

I have altered the deal (0)

Anonymous Coward | about a year and a half ago | (#41695093)

End User License Agreement:

You are to wear these clown shoes and refer to yourself as Merry.

I have altered the deal, pray I don't alter it any further.

[X] Accept [ ] Cancel

Reminds of this sign (1)

Anonymous Coward | about a year and a half ago | (#41695099)

"We are not responsible for anything that happens to your vehicle in this parking lot" or those gravel trucks with the sign, "Stay 200 feet back, not responsible for damages."

Bullshit, you are still responsible. The sign do not form a valid contract, they are there so stupid people won't sue.

Re:Reminds of this sign (1)

Alwin Henseler (640539) | about a year and a half ago | (#41695803)

The sign do not form a valid contract, they are there so stupid people won't sue.

In your example, there is no agreement, no contract, and therefore either party is free to do as they like. For example sue the other party for damages when a mishap occurs.

In this case, there IS an agreement, which could (and likely will) be considered a legally binding contract. You have 2 choices:

1) You don't agree to it. If you are existing customer, that will probably mean you stop doing business with them, can't use their services anymore etc.
2) You explicitly agree to it - in some way or another. From that point on you're bound to the terms agreed upon, unless a court says they're invalid, unreasonable, unenforcable etc.

Very difficult to opt-out too (2)

galiven (231146) | about a year and a half ago | (#41695185)

This one is particularly bad because there is no "obscure and buried opt-out option" to check. The process to opt-out requires you to mail a physical signed letter to some office. I'm pretty sure none of these terms are actually legal and enforceable, particularly in California where the courts have already struck down binding arbitration clauses before, but it's a deterrent to actual justice being served. My wish would be that the "Severability" clause was found illegal, so if the corporation decided to put something illegal in the contract, it voids the whole contract. That would be the only way to get the corporations to stop doing these things.

Re:Very difficult to opt-out too (1)

compro01 (777531) | about a year and a half ago | (#41695895)

Nope, it's legal nationwide. The Federal Arbitration Act overrides state laws prohibiting forced arbitration. See the case AT&T Mobility v. Concepcion.

act of war (0)

Anonymous Coward | about a year and a half ago | (#41695331)

These coordinated actions are an open act of war against the entire middle class.

Again, PayPal, NOBODY CARES WHAT YOU WANT! (1)

Anonymous Coward | about a year and a half ago | (#41695355)

You can't just override laws. That's why they're laws!

Remember how they scammed Notch (Minecraft maker) out of $300,000 because suddenly there was a lot of money coming to his "account", and they called it "(probably) illegal activity", and just took it all!
They could do that, because PayPal is not a bank! So they don't even have to adhere to the already ridiculously lax bank laws.

But THIS they cannot do. It's illegal. And if they try it, they go to jail. End of story.

I call for a global boycott of their criminal asses.
Seriously, FUCK PAYPAL!

Why are we still noting these? (1)

JustAnotherIdiot (1980292) | about a year and a half ago | (#41695387)

As it was pointed out several times when Sony pulled this crap, EULAs < Law.
The problem is not these EULAs, but the fact that regardless when you go to court, he with the more money wins.
Guess what? The one with the more money is pretty much always going to be paypal.

Why does anyone use PayPal? (1)

macbeth66 (204889) | about a year and a half ago | (#41695421)

They are a third party biller and as such, you can't dispute a billing error with your credit card company or bank. You must go to PayPal. That's why I stopped using them. All this other crap is just irrelevant silliness.

As for eBay, I bid/buy things from sellers that take other forms of payment. However, eBay makes it very hard for vendors to accept other forms of payment.

Who would of thunk that the selling of cute little Pez dispensers could lead to such evil.
  .

Re:Why does anyone use PayPal? (0)

Anonymous Coward | about a year and a half ago | (#41695765)

You can dispute the billing...

You just loose your Paypal account.

Hoping the EU kicks them around a bit (0)

Anonymous Coward | about a year and a half ago | (#41695543)

Paypal operates as a bank out of Luxembourg, under European regulation. The EU has been notoriously tough on corporations (see Microsoft). In the case of an egregious violation, lodging a complaint with the regulating agency might work better than a costly court case anyhow.

Micro$oft had a hand in this somewhere. (0)

Anonymous Coward | about a year and a half ago | (#41695599)

You are all shills.

You can thank yourselves for this. (0)

Anonymous Coward | about a year and a half ago | (#41695911)

Its because of how sue happy people are anymore it results in companies doing stuff like this. Companies have to go to extreme measures and do everything they possibly can to shield themselves from legal action because people today are sue crazy. People will sue for every single thing they possibly can, no matter how small or trivial it is because they want money.

I personally dont blame any company that does. Sure a lot of people say its so they can screw over the little guy (because thats the popular bandwagon to be on) but in reality it is because the little guy is screwing over the company. Did you buy a medicine and get a tummy ache while using it? Then sue them in a class action suit. Did you trip and fall at the movies? Sue the theater for damages. Are you black and commited a crime then fought the police and got pepper sprayed? Sue the cops. Are you a woman who acts like a complete bitch and get fired? Sue your employer for sexual harrasement. Did you rob someones house and then get shot by the home owner while doing so? Sue them!

And when it comes to big companies like paypal they also do this to shield themselves from class action suits which are nothing more than money grabs from lawyers. Thats why you see so damn many ads on tv saying "Did you use this product in the past 10 years? Then call me to get your reimbursement in this class action suit". Sure some may say its just a way to get a company to change blah blah blah but at the end of the day its all about money and for lawyers its all about money and the chance to win a major case against a big company to earn prestiege.

Paypal is doing nothing more than protecting themselves against greedy and stupid people and nothing else.

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