Opting-Out of Paypal’s New Arbitration Clause
About a week ago I received an e-mail from Paypal entitled “Notice of Policy Updates.” Though the name doesn’t sound ominous, what the e-mail was really about is. The e-mail stated:
“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.”
As is commonly seen in car purchase contracts, this arbitration clause seeks to eliminate class actions. If you’d like to access the policy updates, sign into your Paypal account. On the right side you’ll see a “Notifications” tab. Click on that and then “Policy Updates” Paypal’s new arbitration clause is not a good solution for the consumer, and, unfortunately, if you take no action the arbitration clause will become part of your agreement with Paypal. If you are an existing Paypal user, you must affirmatively opt out by December 1, 2012. I suggest following the opt out procedures:
(1) The “Opt-Out Procedure” is found in section 14.3(e) of the updates
(2) Mail a signed and dated notice that simply states “This is my Opt-Out Notice. Through this notice I do not agree, and therefore reject, the Agreement to Arbitrate (Section 14.3).” The notice “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.” Be sure to keep a copy of your Opt-Out Notice for your records. If you’d like to be ultra-safe, you can send the Notice certified mail, return receipt requested (to prove receipt by Paypal).
(3) If you are a new PayPal user, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time.
(4) 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.
(5) Mail your Opt-Out Notice to:
PayPal, Inc.
Attn: Litigation Department
2211 North First Street
San Jose, CA 95131