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Comment by DebtDeflation | Hacker News Reader

Wait, if they ban you and you have a balance at the time, they just keep your money? That can't possibly be legal.

It is because it's in their T&C's. And they fought tooth and nail for years to avoid being classified as a bank so the normal bank regulations and customer protections don't apply to them.

Watch them magically reverse these policies once FedNow arrives and they actually have some competition.

They are a bank in the EU, couldn’t get around that one.

Banks can do this too if you hit the right set of circumstances/red flags.

It is typical for large corporations to have a bunch of legal fine print. This effectively allows them to do just about anything, as long as they have a "reason".

They nominally don't do just anything (like take your money), because they want people to use their service, and if they cheated everyone all the time, you'd hope that people would catch on and stop using their service.

Having said all that, dealing with illegal transactions, fraud and scammers is tough. The corporations will, honestly, make mistakes, and having enough customer service to deal with it all properly is expensive. Hence automated bans. Often there is no recourse except moving towards a lawsuit, which may be unreasonably expensive for most cases, as compared to the money that has been lost.

While I agree that dealing with fraud is tough, what they are doing is pushing this risk onto their customers.

Yup. They closed my account with money in it, with no explanation why my account has been closed and absolutely zero recourse.

I'd be curious to know what happens if you sue them in small claims court. Jurisdiction may be an issue, but if they stole from you while you were home, then I'd argue your hometown is the proper jurisdiction. Note: IANAL.

I'd guess that they'd just not show up, you'd get a judgement, and then just have to figure out how to get it paid. Or maybe they will show up, hire a local lawyer to represent them and point out the fine print in the ToS that forbids holding them accountable for any reason in any venue. And with any luck, the judge will laugh at them and give you treble damages.

I saw a post on here recently talking about how they got Paypal into court. I'll have to try and find it again.

Problem is, it's not worth whatever court costs I would probably incur. Granted, there isn't a lawyer involved in small claims, but could they judge order me pay their lawyer fees if I lose?

Depends on the laws in your jurisdiction. I think in a lot of cases, small claims courts put very low caps on legal fees that can be claimed. The defendant might only be able to claim a few hundred dollars at most.

You might want to check if lawyers are even allowed in small claims. If they aren't they would have to sent a company representative, and there would be no 'lawyer fees'.

Well in Michigan (where I am located) they are not allowed. I am pretty pessimistic and just assume there are fees I don't know about

Maybe we could create a sort of small mutual insurance fund to pay legal expenses in such cases.

I am not smart enough to know if that is already a thing or not...

The ToS has a forced arbitration clause, so a judge would never get to the merits of the case. Any disputes must be resolved through an arbitrator that Paypal gets to pick. Judges love cases with forced arbitration, because they can just issue a summary dismissal and go to lunch early.

Forced arbitration clauses should be illegal just as indentured servitude should be illegal, and for similar reasons.

They may have an arbitration clause, but even then,you would have a good chance of getting your money back if you took them to arbitration.

Yup, thx for the reminder. I had a small-ish balance sitting there and your reminder just provoked me to login, check it, and transfer it out. Can't wait for that new FedNow Service -- it should be coming soon! [0]

[0] https://www.federalreserve.gov/paymentsystems/fednow_about.h...

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