Pay Pal Blocks Class Action Lawsuits In New Policy Update

While I realize there are plenty of lawyers taking advantage of class action lawsuits everyday, does a company really have a “right” to deny your involvement in a class action suit if you use their product or service?  Pay Pal seems to think they can play this card, and on November 1st, 2012, their new policy changes will take effect, including this clause below…

“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”

Another portion of their policy changes I find interesting states that Pay Pal is not insured by the FDIC, which means if you have a balance with Pay Pal, it is not insured as if it were actually in an FDIC insured bank.  I never carry a balance with Pay Pal, and I don’t expect a balance with them to be insured anyhow.  However, my interpretation(disclaimer; I have no legal background or experience whatsoever) of these two additions together basically reads something like this…  If Pay Pal were to mysteriously misplace funds from every account, each user would have to take their own individual legal action against Pay Pal.  If Pay Pal were to crash, get hacked, etc for whatever reason, there could be no class action lawsuit from it’s users to recover the funds.  I am reading this right?   For more opinions and discussion on this matter, check out this thread on Reddit.

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