Most companies have been open about the fact that they’re changing policies in response to the court case, but they insist that it’s better for customers as well. Since then, these clauses have steadily been added to terms of service and licensing agreements, taking away the user’s right to participate in a class action lawsuit. Concepcion, however, the Supreme Court ruled that the Federal Arbitration Act took precedence over state laws, letting companies add clauses that limit lawsuits as they see fit. In the April 2011 decision AT&T Mobility v. While not every state did so, the result was that companies wrote agreements to accommodate the strongest consumer protection laws and applied them across the board. Until relatively recently, states could require companies to allow class action lawsuits in their terms of service. There’s a simple reason why PayPal and others are making these changes: because they canFirstly, there’s a simple reason why PayPal and others are making these changes: because they can. So what does this mean for the people who use PayPal and other services? Those suits are tentatively being settled, but it’s doubtful they would have been the last. ![]() In 2010, two separate groups filed against it, alleging that the company violated consumer protection laws by holding funds for up to 180 days without explanation. While these problems are usually resolved within a few days, PayPal is also no stranger to class action suits. High-profile customers - from Minecraft developer Markus Persson to Regretsy’s April Winchell - have blasted its review policies and customer service, the latter after PayPal shut down a Christmas charity drive, kept a portion of the funds, and then attempted to freeze the account. ![]() But PayPal manages money rather than building consumer products, and it’s widely criticized by users. Valve, for example, introduced a similar change in August, barring its Steam users from suing collectively. In some cases, these clauses pose mostly an abstract concern for customers of a beloved company. Stopping class action suits is sometimes an abstract worry, but PayPal has a history of legal challenges Unless users send a written opt-out notice, they’ll be barred from group suits in the US, something that’s become increasingly common for companies since last year. ![]() Its new terms of service require any disputes between a user and PayPal to be resolved with arbitration, or in small claims court if they qualify. On November 1st, PayPal will follow Sony, Microsoft, Netflix, and many others in banning class action lawsuits by customers.
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