PayPal Class Action Lawsuit – A Hoax or Real – You Decide

Out of the Blue Comes Barristers Bearing Money

This morning, in my email came this interesting piece of news - or hoax - hmmm lets look at it...

It seems that a legal firm in Dublin, Ohio (of all places) is contacting little ole me about suing PayPal.

The notice is informing PayPal users of a class action law suit (A lawsuit brought by one or more plaintiffs on behalf of a large group of others who have a common interest).  In these days of phishing schemes and email hoaxes I became a bit skeptical upon reading this information in my inbox.  (The text from the lawsuit email is below)

But after following the links back to the law firm Garden City Group, Inc. and reading the notice it seemed legitimate.  The law firm site appears to be a real established website even though the age of the domain can not be determined (See comments - age determined).  The site has 3400 inbound links, so it is not new to the Internet.

Then I found the case mentioned in SEC filings by eBay with the following text:

In March 2005, eBay, PayPal, and an eBay seller were sued in the Supreme Court of the State of New York, County of Kings (No. 6125/05) in a purported class action alleging that certain disclosures regarding PayPal's Buyer Protection Policy, users' chargeback rights, and the effects of users' choice of funding mechanism are deceptive and/or misleading. The complaint alleged misrepresentation on the part of eBay and PayPal, breach of contract and deceptive trade practices by PayPal, and that PayPal and eBay have jointly violated the civil RICO statute (18 U.S.C. Section 1961(4)). In April 2005, eBay and PayPal removed the case to the U.S. District Court for the Eastern District of New York and the plaintiffs filed an amended complaint in the U.S. District Court (No. 05-CV-01720) repeating the allegations of the initial complaint but dropping the civil RICO allegations. The complaint sought injunctive relief, compensatory damages, and punitive damages. In September 2006, the parties finalized a preliminary settlement agreement.

If the settlement agreement has been finalized, how can any new parties join the class action suit?

I have repeated the information from the email below, but I suggest to any and all readers to be very careful about sending in any information to this site. It could be an elaborate hoax or phishing scam.  I see several posts in forums from around the country just this morning about this email.  Lets confirm the source before sending in our sensitive information.

Remember - NEVER GIVE ANYONE YOUR PAYPAL OR EBAY PASSWORDS

So what say you? Is it Real or is it Spam?

Update: Caveat Emptor - Buyer Beware

If you proceed directly to the comments section of this article you will find arguments both for an against this being a scam.  Please read the comments, but also follow up with your own investigation before submitting any kind of personal information.  Many comments seem reasonable on both sides of the fence, please do not make a decision to follow up on this (email about a class action Paypal lawsuit) simply on the content found in this article.

I have not verified any comments, nor have I verified the email is legitimate or not. The article is presented as a question and I appreciate everyone weighing in with comments to help answer that question.

We simply do not want to find someone either dismissed this opportunity or followed through with it, solely on the basis of this article or any comments below (from unknown, albeit quite helpful, parties).

Update#2 PayPal "Pink" Confirms on Discussion Forums

amanda@paypal.com  Aug-29-08 11:51 PDT

Hi All,

I can confirm that in September 2006, PayPal reached a settlement agreement with a proposed class of PayPal customers in an action pending in U.S. District Court in Brooklyn. The suit was filed in 2005 on behalf of a class alleging that PayPal did not clearly communicate information about its consumer protection programs related to specific types of transactions. And I can confirm that the settlement administrator (Garden City Group) was slated to send email notice to the possible claimants starting August 29, 2008. PayPal settled the case to avoid further costs of litigation and devote resources to more productive aspects of our business.

To get additional information about the settlement and whether or not you are eligible to participate in the settlement, please visit the settlement website at: http://www.steelesettlement.com.

Amanda

Thanks to: Sophie for finding the PayPal Pink Confirmation on the discussion groups!

Steele et al. v. PayPal, Inc. et al., Civil Action No. 1:05-CV-01720 (ILG)(VVP)

Notice from Federal Court. Please Read.

You may be eligible to receive a benefit from a class action settlement if you funded a PayPal transaction using a source other than your credit card between February 1, 2004 and the present.

A federal court has directed that this notice be sent to inform you of a proposed class action settlement. Records show that you may be eligible to receive a benefit under the proposed settlement.

The settlement will resolve a lawsuit against eBay Inc. and PayPal, Inc. (collectively, "Defendants") involving claims arising out of representations in the PayPal User Agreement regarding PayPal's policies and practices for responding to refund requests from those customers who pay for transactions through PayPal using funds from funding sources other than credit cards. Under the settlement, Defendants have agreed to establish a settlement fund of $3.5 million to pay claims to potential class members. The proposed Class is defined as:

all U.S. based PayPal account holders who funded a PayPal transaction after February 1, 2004, using a source other than a credit card: (i) who subsequently requested a reversal of the transaction through PayPal's prevailing Buyer Complaint Policy and/or Buyer Protection Policy (collectively, "Policies"); (ii) who did not receive a refund equal to 100% of their transaction payment in response to such request from PayPal or their bank; and (iii) who, through the timely submission of a Claim Form under oath, attest to a reasonable and good faith belief that they would have received a full reversal of such payment had they used a valid credit card in their possession at the time of the subject transaction to fund the payment and filed a timely chargeback request with their credit card issuing bank. Excluded from the Class are any judicial officer to whom this Litigation is assigned; PayPal, eBay and any of its affiliates; any current or former employees, officers, or directors of PayPal or eBay; any Persons currently residing outside of the United States; and, all Persons who timely and validly request exclusion from the Class pursuant to the Notice.

To see if you are a Class Member and to obtain full notice of the Settlement, the required procedures, the deadlines, your obligations, and your options, you must visit www.steelesettlement.com. This email is only a brief summary of the full notice that is posted on the website.

If you are an eligible Settlement Class Member, you have rights, obligations, and options under the proposed settlement. You have until December 14, 2008 to file your Claim Form and Certification Form. Your legal rights are affected whether you act or not.

1.     Submit The Claim Form And The Certification Form By Mail

This is the only way to get a settlement payment. You must: (1) print and fill out the Claim Form and return it by mail to the address provided on the Claim Form; and (2) print the Certification Page of your Claim Form, sign it, and return it by mail to the address provided on the Claim Form. Your Claim Form and signed Certification Page must be mailed and postmarked no later than December 14, 2008. For more information on these deadlines, the Effective Date of the settlement, the Claim Form procedures, and the settlement benefit, you must visit www.steelesettlement.com.

2.     Exclude Yourself – Opt Out of the Settlement

If you do not want to remain a member of the Class and participate in the Amended Settlement, then you may exclude yourself (opt-out) from the Class by mailing or delivering (email is not permitted) your written request. Your original, signed request for exclusion must be RECEIVED on or before October 31, 2008 and mailed to the following address:

PayPal/Steele Class Action Settlement
c/o The Garden City Group, Inc.
P.O. Box 9309
Dublin, OH 43017-4209

Your request for exclusion must contain your name and address, be signed by you, and include the reference "Steele et al. v. PayPal, Inc. et al., Civil Action No. 1:05-CV-01720." If you exclude yourself from the Class, you will not participate in the Amended Settlement and will not receive any payment from the Amended Settlement.

3.     Object

Write to the Court about why you do not like the settlement. Your objection must be filed with the Clerk of the United States District Court for the Eastern District of New York, Brooklyn Main Office, 225 Cadman Plaza East, Brooklyn, New York 11201, no later than October 31, 2008. Pursuant to the Court's Order, you may not be heard on or entitled to contest the Court's decision unless you have filed written objections no later than October 31, 2008. A hearing ("Settlement Hearing") shall be held before Hon. I Leo Glasser on November 17, 2008 at 10:00 a.m. at the United States District Court for the Eastern District of New York, Courtroom 8B South, 225 Cadman Plaza East, Brooklyn, New York 11201.

4.     Do Nothing

You will automatically be included in the Settlement Class and give up your right to be part of any other lawsuit about the claims in this case, but you will not be eligible to receive a settlement benefit unless you submit a Claim Form.

To get complete information about the proposed Settlement, the required procedures, the deadlines, your obligations, and your options, you must visit www.steelesettlement.com.

Please do not contact PayPal, or PayPal's customer support about this Notice, or the Settlement. Instead, you must visit www.steelesettlement.com for complete information about the proposed Settlement, the required procedures, the deadlines, your obligations, and your options.

Please do not reply to this message. We are unable to respond to inquiries sent in reply to this email. To contact us, please access the official settlement website at www.steelesettlement.com.

Read More Here: Steele Settlement

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72 Responses to PayPal Class Action Lawsuit – A Hoax or Real – You Decide

  1. Smackadoodle August 30, 2008 at 10:14 am #

    If you look at the forms and the email they are not asking for any account passwords, they are not asking to log into your account from their website. If you look on garden cities website it is listed on there, as for paypal saying its a phishing of course they will say that, if it turns out they have to pay out don’t you think they want people to think its a phising scam so they don’t have to fork over alot of money.

  2. az1324 August 30, 2008 at 4:15 pm #

    @Smackadoodle the settlement has already been agreed at 3.5 million so it doesn’t matter who knows about it. the thing is the more people that do submit claims the lower the percentage of reimbursement will be. so it’s in the interest of the class that fewer people submit claims. so yeah its fake people don’t do it!!

  3. Sophie August 30, 2008 at 5:33 pm #

    “I’m still not convinced of anything until some official statements are made on something such as Fox News or CNN…”

    JD – FOX News??? Are you kidding me? For God’s sake, they make up the freakin news as they go along. FAUX News is more like it.

    To all you chicken littles out there, don’t file. It’s more for me. My claim is in the mail and on the way.

  4. Class August 30, 2008 at 5:51 pm #

    The settlement agreement says that Pay Pal is required to notify every member of the class by e-mail.

  5. Kim August 31, 2008 at 1:38 am #

    IT’S LEGIT… AS OTHERS HAVE POSTED…

    amanda@paypal.com View Listings | Report Aug-29-08 11:51 PDT 3 of 45
    Hi All,

    I can confirm that in September 2006, PayPal reached a settlement agreement with a proposed class of PayPal customers in an action pending in U.S. District Court in Brooklyn. The suit was filed in 2005 on behalf of a class alleging that PayPal did not clearly communicate information about its consumer protection programs related to specific types of transactions. And I can confirm that the settlement administrator (Garden City Group) was slated to send email notice to the possible claimants starting August 29, 2008. PayPal settled the case to avoid further costs of litigation and devote resources to more productive aspects of our business.

    To get additional information about the settlement and whether or not you are eligible to participate in the settlement, please visit the settlement website at: http://www.steelesettlement.com.

    Amanda

    http://forums.ebay.com/db2/thread.jspa?threadID=520006442&tstart=0&mod=1220035892410

  6. LH August 31, 2008 at 7:38 am #

    Hi,
    I could not click submit on the claim form as it appears to only be applicable in the States and not the UK as it asks for state and zip code and without this info won’t proceed. Unless I just download and post?

  7. Tola August 31, 2008 at 11:05 am #

    It’s pretty clear to me that this is legit, because garden cities is clearly legit, and the link posted above from the garden cities site to steelesettlement.com shows that garden cities is endorsing it.

    But I’m really pissed at whoever organized this fiasco. All it would have taken is a googlable link from paypal.com somewhere saying “Yes we gave the email addresses to Steele”. Maybe even someplace where the paypal spoof verification department can find it. Really, there should be a webpage somewhere of all the entities that paypal has given our emails to, so we can know if they are legit.

    I’m waiting for the next lawsuit, whose parties will be all the people who were entitled to a refund but didn’t get one because this whole thing smelled too much like a scam.

  8. Scott Pooler August 31, 2008 at 11:12 am #

    Tola,

    Very good points and interesting observations. It does seem worthy of some consideration that legal firms might employ a strategy to make information like this seem more like a scam than not to discourage legitimate claimants from even considering the option of joining the case.

    From my dealings with legal firms in the past, I certainly would not see any reason to question this is in fact the ultimate strategy.

    As for PayPal, they are not going to post a page of lawsuits they have settled or have lost. That would be asking for too much honesty and free disclosure.

  9. Paul September 1, 2008 at 3:55 pm #

    Paypal sent me an email on this telling me it was an elaborate Phishing Scam.
    In order to find out, one must contact the Fed Dist Court that is holding this case and the secty of that court can give you all the info you need since it is a class action suit

  10. Keith September 10, 2008 at 5:36 pm #

    Hello all. It is time for some common sense here. I read tons and tons of forum talk about the scam going on here… It took me about 15 seconds out of my day to get to the bottom of this. Well, I called Honorable Leo Glasser’s secretary and confirmed this Class Action Suit against PayPal. THIS IS LEGIT! If you like, you may call as well. The phone number is (718) 613-2440. Here is the link to the info for Judge Glasser http://www.nyed.uscourts.gov/General_Information/Court_Phone_Book/Senior_Judges/senior_judges.html

    Thanks,
    Keith

  11. Zach September 17, 2008 at 2:57 pm #

    I live in Dublin, Ohio. I went to their office (the address that that JD published) and spoke to the receptionist. It is indeed real. I post this against my better judgement as I don’t want you to get a cut of the $2 I’m going to make.

    The Garden City Group
    5151 Blazer Pkwy Ste A
    Dublin, OH 43017
    (614) 289-5400

    http://maps.google.com/maps?f=q&hl=en&geocode=&q=The+Garden+City+Group+5151+Blazer+Pkwy+Ste+A+Dublin,+OH+43017&ie=UTF8&ll=40.110376,-83.126507&spn=0.052252,0.103512&z=13&iwloc=A

    I was extremely skeptical but even if you don’t believe me. I doubt that a scammer would get space to set up, under a legitimate business’s name, have a receptionist, a legitimate court case number (the case originated in 2005 but the settlement has been drawn out until mid November), and send out letters which don’t ask any real information to be sent back to a PO box (which can only be acquired by proving that your identity to the post office).

    Here’s the Franklin County Auditor’s website on the location. Garden City Group leases their space from the companies listed. Call them if you’re still worried.

    http://franklin.governmaxa.com/propertymax/rover30.asp

    Do all this research yourself if you think my links are fake.

    To the sleuths who still think it’s fake: You’re right, it is fake. Don’t file your claim so the money is split less ways.

  12. Steve Odem September 21, 2008 at 7:51 pm #

    I’m a registered user with the Federal Courts’ PACER System.

    That case was originally filed April 5, 2005

    It really is an active case before Senior Judge Glasser in the Eastern District of New York.

    Plaintiff Mike Steele represented by Marina Trubitsky
    Law Office of Marina Trubitsky
    11 Broadway
    Ste. 861
    New York, NY 10004
    212-732-7707
    Fax: 212-732-7708
    Email: dtcassociates@yahoo.com
    LEAD ATTORNEY

    There was a status conference last week.

  13. Diana September 25, 2008 at 8:31 pm #

    I too received this email. To make it simple for everyone reading my post this is what I did:

    Went to paypal.com home page and in the upper right hand corner I entered ‘Steele’ in the search box.

    The results, mid-page a clickable link to ‘Legal Agreement – PayPal’.

    Scroll to the bottom and follow the link to Steele Settlement website.

    There you have it.

    Cheers,
    Diana

  14. i really hate paypal October 9, 2008 at 4:30 pm #

    THE WHOLE THING IS REAL !!! All you have to do is to go to your PayPal account, scroll down to the bottom and click on the Legal Agreements link, then look at the bottom left side of the page and you will see another link to SteeleSettlement.com. It’s just NOT that hard to figure out.

  15. Jeremy November 13, 2008 at 5:43 pm #

    This whole SteeleSettlement case was a Godsend to me!!! I filled out the form maybe 2 months ago now and sent it via USPS. I am looking forward to this court date actually happening.

    The worst that can happen is that I don’t get the money I was scammed 2 years ago from back. I had already accepted that loss so not receiving that money shouldn’t be devastating if this case falls through. On the other hand, I’ll walk away a winner if they reimburse me for my losses.

    If you’ve experienced unlawful losses through PayPal/eBay definitely participate in this settlement before it’s too late!

  16. Raymond November 19, 2008 at 1:20 pm #

    Our loss through trusting a New York based ebay power seller and pay pal protection was over $3,600 not including the $513 in Pay Pal required claim verification costs and return shipping expenses. We prevailed in our claim to pay pal and after ninety plus days, received $400. In my opinion, the fraud and the crime have been perpetrated by pay pal.

  17. Suze March 11, 2009 at 1:37 am #

    Wish it was true, got that email at the same time, 2008, as I was horribly scammed on eBay. Went through the dispute process in paypal, won, as in granted a refund, and was told to return the fake movie props.

    (Sellers were also caught selling fake props in an auction house in Tx., not just eBay.)

    Was rest assured when the $1400.00 worth of useless fake props were returned to the seller, we’d get our money back, all they needed was confirmation of delivery. We sent the products back, requesting a signature for delivery, had a tracking number. We did everything expected of us, trusting that when the delivery was confirmed we’d have our refund, as per word for word from paypal.

    Paypal has the confirmed delivery date, but refuses to give us our refund due to the fact that they can’t get a signature from the post. The crook sellers now have our $1400.00 plus the useless crap that they resold on eBay.

    Yes I wish it was true, cause we deserve our money back. It cost us $80.00 for shipping to get it, and we had to pay the shipping to send it back! Ontop of the insult of having to fight them to win the dispute, which took months, countless phone calls and emails, as the sellers fought us tooth and nail. I suppose if they can swindle people for years and years, they knew exactly what to do, and chewed us up and spit us out without us knowing what hit us.

    The sellers denied getting the product, there was no signature. Even though paypal has a confirmed delivery date. It should be the ONLY thing paypal needs. Paypal already KNOWs the guys are con artists, why should we all count on them being honest to admit they recieved the items, when they can’t deny there is a delivery date?

    How the signature has been misplaced, or never made in the first place is a mystery. We specified signature on delivery. No one can tell us why, only that paypal closed the dispute, and we get no refund. They turned thier back on it.

    If anyone has suggestions on how to get our money back it’d be appreciated. AND this email came at the time we were pulling out hair out, but we didn’t respond, we were already bit by a scammer big time, and couldn’t handle another con job.. if it was?

    If this was legit, what is it with the expires, or are there any new cases, cause its still on-going.

    Suze

  18. kristy s April 16, 2009 at 12:30 pm #

    I did not get a email people i got a card in the mail about the class action law suit and it seems phony i would not particapate on this class action suit
    the tops of the card to watch out for in the mail all is
    settlement administrator
    c/o The Garden City Group Inc
    p.o. box 9285
    Dublin , Oh 43017-4665

    you can log on to http://www.webmarketingsettlement.com
    this will let you pull up a advidavite you need to have notorized and send in also you need to fill out a form to add your information
    like account number name and ssn
    that seems fishy to me that seems to be identy theft and the company has a lagit website doesn’t mean they are lagit i believe this is a scam and i would be aware of anything like this if i were you all .

    It just seems to good to be true and if it is to good to be true it is people that is a scam the next thing they will want is for you to pay and that is also a scam . paypal and ebay had been hacked into more times then we all can count many hackers go into for personal information and we all get those emails your account is suspended or to many logs in that is a scam when you know in your heart that you did not give anyone that information.

    Also these could be ramdam calls emails and mail from this company to string up business for this law suit no one can add you with out your concent no one , as for people who are wondering like me why did i get this in my email and my mail because they are scammers it all looks lagit but common is it. i would contact the the federal trades commission and the better business bureau to be sure this is a lagit deal and not one of those scams .

    common sense is the best way to over power scammers all !!!!!!

  19. George Z. May 2, 2009 at 5:12 pm #

    Has anyone received anything yet? I filed in Sept ’08 and have heard nothing. Is this law firm still in business?

  20. George Z. May 2, 2009 at 5:13 pm #

    Notify me.

  21. Lacey March 20, 2010 at 5:53 pm #

    This is the read deal people and a judgment in the favor of finding pay pal guilty was awarded in April 2009….as far as how long it will take to get the money millions of claims have to be reviewed and determined that my friends is going to take some serious time. I will keep you posted as I just placed a call to The Garden Group requesting any information they may have.

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