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PayPal Class Action Email

Summary:
Email claims that recipients may be entitled to a payment due to the settlement of a class action against online payment company, PayPal (Full commentary below).



Status:
True

Example:(Submitted, August 2004)
Due to the length of the email, I have only reproduced a small part of the notice below:
Dear [Name Removed],

IF YOU OPENED A PAYPAL ACCOUNT BETWEEN OCTOBER 1999 AND JANUARY 2004, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.

PLEASE READ THIS NOTICE CAREFULLY.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

In re PayPal litigation
Case No. CV-02-01227-JF (PVT)

NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT

1. WHY DID I GET THIS NOTICE?
You have been sent this Notice because the records of PayPal, Inc. indicate you are a current or former PayPal account holder. This means you may be eligible to receive a payment from the proposed class action settlement in the lawsuit In re PayPal Litigation, Case No. 02 1227 JF PVT, pending in the United States District Court for the Northern District of California in San Jose. This Notice provides a summary of the terms of the proposed settlement. It also explains the lawsuit, your legal rights under the settlement, what benefits are available to you under the settlement, and how to get them.

2. WHAT IS A CLASS ACTION?
In a class action, one or more people, called Class Representatives (in this case Roberta Toher and Jeffrey Resnick), sue on behalf of people who have similar claims. All of these people are members of the Class. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. United States District Judge Jeremy Fogel is in charge of this class action.




Commentary:
During 2004, many PayPal account holders received an email notice that claimed that they may have been entitled to a payment due to the settlement of a class action against online payment company, PayPal.

Although the notice could have easily been mistaken for some form of phishing scam, the information in the email was in fact true.

A class action lawsuit was filed against PayPal in March 2002 because of an alleged violation of a federal statute. The action reached a settlement in 2004. An official FAQ about the settlement that was available at the time noted:
The parties to the action reached a Settlement and the e-mail letter you received is the "Notice" required under the law to be given to each class member that can be identified with reasonable efforts. Under the terms of the proposed Settlement if you opened a PayPal account between October 1, 1999 and January 31, 2004, you may be included in the Settlement Class
It should be noted that, while this particular email was legitimate, PayPal is almost continually targeted by phishing scammers. Be cautious of any emails purporting to be from PayPal that request you to update account details or provide personal information.

References:
Mass Action on PayPal Settlement Site
PayPal Sends Users Notice of Class-Action Lawsuit Settlement
PayPal settlement e-mails confuse recipients

Last updated: 24th May 2007
First published: August 2004

Write-up by Brett M.Christensen