I Fought The PayPal And I Won

Payment processors hostile to freedom of expression hate me for this one weird trick!!

About four years ago, my PayPal account was unceremoniously thrown into a van and disappeared to a black site. All I got to commemorate my account’s suspension was a riddle of an email claiming my account was “permanently limited” due to some unspecified “excessive risk.” I had no idea what PayPal was talking about, as I had used the account for more than 14 years without issue. Given the timing, though, I suspected it had something to do with my involvement in a certain group named after a certain slavery abolitionist.

I was reminded of this recently because PayPal has been up to some bullshit, selectively banning politically unpopular accounts for what seems like made-up reasons, and “infamous” sex realist Colin Wright is only one of their latest victims.

While PayPal is technically a private company that can work with basically whoever it wants for whatever reason, its centralized role as an online payment processor makes this a weirdly potent free speech fight. So I figure it might be useful for me to tell the story of how I sent in commandos (read: deployed my obsessive love of drawn-out conflict involving legalese) to rescue my account.

I called, emailed, and waited on hold, but never got a straight answer from PayPal’s customer service drones. They endlessly repeated that I had violated PayPal’s acceptable use policy as if it were some mantra. If I asked for any detail whatsoever, their response had the tone of a schoolteacher frustrated at having to explain repeatedly to the same kid that crayons should not be shoved up one’s nose. I knew what I did to get my account deleted, apparently. If I wanted to hear it from them, I’d need a court order.

I took inventory of my options.

Here is what I did not have: money in the account, any serious reliance on it, or any wisp of nostalgia for the 14 years we shared.

Here is what I did have: too much free time and a whole heap of pettiness to propel things forward. 

So I made a crazy decision. I read PayPal’s User Agreement.

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Virtually every modern-day service comes with a gargantuan boilerplate contract that governs everything from privacy policy and liability indemnification to which one of your children you agree to sacrifice. Since you are reading this online, you have likely hit AGREE on hundreds of these without reading a word of them. Within these so-called terms of service agreements, arbitration clauses have become the norm. So if you end up having a dispute with one of these companies, the contract you “agreed” to means you are legally not allowed to take them to a real court. Your only recourse is arbitration.

Arbitration is nothing more than privatized dispute resolution. Because the contours of arbitration can be whatever the parties agree to, it’s always been popular in dealing with international commercial disputes. Compared to traditional courts, arbitration proceedings have no problem with straddling international borders, and arbitration judges can be heavily specialized (for instance, there’s probably one guy whose entire life is dedicated to nothing but disputes over flowers shipped from Kenya).

Foisting arbitration on consumers became an increasingly attractive proposition around the 1980s as domestic corporations got bigger, helped along with some favorable SCOTUS rulings. Arbitration clauses gave corporations some peace of mind, as it allowed them to avoid potentially ruinous class action lawsuits and mitigated the headache of keeping track of 50 different state jurisdictions.

For consumers, I suspect that much of the power “arbitration” seems to confer on corporations lies in its opacity. Real courts have public trials and published opinions and dramatic film depictions. Arbitration — by design — happens behind closed doors in boring confidential proceedings. So the only information we get comes to us piecemeal, but it indicates consumers and workers win between 1% to 6% of the time. These are grim statistics for anyone seeking vindication, but there are some potential issues with the methodology. Because initiating arbitration is cheaper and easier than a lawsuit, it’s quite possible — even likely — that some arbitration cases go forward that otherwise would be unlikely to make their way into a courtroom, which may skew the numbers. At the same time, because arbitrators generally have to be approved by both sides, they may be biased to rule in favor of frequent fliers (such as big companies) just to help their chances at getting picked again in the future.

Companies don’t help make this process seem any less intimidating, because why would they? PayPal’s User Agreement is a ridiculous 60 pages in length! They know no normal person is going to read all that, especially for something as disposable as a free service.

Of course, I am no normal person. I am a lawyer. And yet, the only advantage that superpower provided me was the confidence to actually crack open the user agreement. Once I found the relevant section, PayPal’s language came across as surprisingly plain — no JD required. You can decide for yourself by reading along.

According to the user agreement, the first step on my path to potential redemption was to send PayPal a Notice of Dispute. I had to fill out a form. This is what it looks like in its entirety:

Simple. All I wrote was something along the lines of “PayPal suspended my account and I have no idea why. I’d like it back, please.” I printed a copy, mailed it via Certified Mail, and waited. PayPal says that if you can’t resolve whatever problem you have within 45 days (back when I did it, it was only 30 days), then you can escalate to the next level. I double-checked the tracking number to make sure that PayPal’s legal department received my dispute notice. I was even magnanimous enough to call them to give them a heads-up, but the customer service reps had no idea who to transfer me to, and I gave up after getting bounced around a bunch. It was just radio silence from PayPal, overall.

So then I moved to step two, which is demanding arbitration. Maybe the most important thing to say is that for most disputes, PAYPAL WILL COVER THE COST OF ARBITRATION:

PayPal isn’t alone here as Etsy has basically the same provision, as does Amazon Pay and many others. (Notably, neither Square nor Stripe offer to cover arbitration costs, and Stripe even requires the loser of the dispute to pay the winner’s entire legal expenses. Also notable: Twitter does not require arbitration.) Companies offer to cover the costs of arbitration to avoid having a (real) court strike down the entire agreement as “unconscionable” — essentially saying that the terms are so lopsided that no reasonable consumer would ever have actually agreed to them, AGREE button notwithstanding. My empty PayPal account was definitely worth less than ten thousand big ones, so I had nothing to lose. I filled out the Demand for Arbitration form from the American Arbitration Association (AAA) — again, not a particularly arduous process —  and sent it on its merry Certified Mail way on January 4, 2019. Then I waited again.

On January 11, 2019, AAA received my demand letter:

Seven days later, I got this email:

From: service@paypal.com

Date: Fri, Jan 18, 2019, 5:08 PM

Subject: Your PayPal Account Access Has Been Restored

Dear Yassine Meskhout,

Thank you for contacting PayPal regarding the recent limitation of your PayPal account.

We have further reviewed your case and determined that your account is currently not in violation of our Acceptable Use Policy. As such, the limitation on your account has been lifted.

We sincerely appreciate your business and offer our apologies for any inconvenience this disruption in service may have caused.

LOLOLOLOLLLLLLL

I wasn’t there, so I can only speculate about what transpired. My guess is the bozos at PayPal HQ’s mailroom threw my first letter into a pile somewhere. It wasn’t until I took the unprecedented step of *gasp* following the exact process laid out in their user agreement and demanding arbitration that they got their legal department’s ass into gear. By the terms of their own agreement, PayPal was on the hook to cover the costs of arbitration entirely on their own, and there’s just no way that would have been a worthwhile financial decision when all I was asking for was my pitiful account back. The same thing happened to DoorDash in 2019 and to Amazon in 2021 on a much bigger scale, where they both capitulated after getting swamped by thousands of coordinated arbitration demands.

All this makes their “upon further review” epiphany bullshit even funnier. After wiping away the tears of laughter I did… nothing. I waited still, content to see where else this would go. From AAA’s perspective, they still had a live dispute on their docket and PayPal and I were getting primed to duke it out.

On January 22, 2019, I had a few missed calls from the same phone number. The next day, a senior member of PayPal’s legal team emailed me directly to say:

I am reaching out to you because it is my understanding your AAA demand has been resolved. Additionally, you should have received an email from PayPal last Friday, January 18, 2019, informing you the limitation on your PayPal account ending **** had been lifted and you now have complete access. We kindly request you contact AAA and withdraw your AAA demand.

What a refreshing change in tone! I had no reason to be chivalrous, so I indulged in some pettiness, asking for PayPal to cover $16.99 in miscellaneous shipping and printing costs:

Maybe I could’ve asked for more, but that didn’t interest me. I was content to know that even an amount as insignificant as $16.99 would be enough of a pain in the ass for PayPal’s corporate apparatus to approve. They never explained why my account was suspended, but I did at least get it back, got reimbursed for shipping, and lived happily ever after.

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Fast-forward to the future. It is June 2022 and I am in Denver for the Heterodox Academy conference. I ran into Colin Wright, who had just a few days prior tweeted about having his PayPal and Etsy accounts suspended with no explanation provided. PayPal’s messaging has barely changed over the years: Their customer service representatives still try to bloviate and bluff with talk of “legal subpoena,” and they conveniently say nothing about the dispute resolution process actually contained within their own user agreement. Having been through that same rigamarole, I explained my experience and offered to assist in getting his accounts reinstated. He gave me his contact information and a few days later, I emailed him a detailed guide (with links and everything) with the steps he needed to take.

Colin has brought up the issue publicly multiple times since then (writing about it in Quillette and the New York Post for example), but he never responded to my email until I reached out to him for comment on this piece. He did share correspondence with me where prominent free speech attorneys told him, in an apparent contradiction to my claims, that he had no viable legal recourse to getting his account reinstated. I had transmogrified into a gadfly in his mentions, heavily implying Colin was intentionally choosing not to solve the problem, but I was off-base with my insinuation. Colin was bombarded with countless random people (besides just me) offering their one weird trick to solve the problem, and he had no reason to believe any of them knew something that experienced advocates did not. Colin has now initiated dispute resolution with PayPal using the steps I gave him, and I’m intensely curious to see how it will play out.

I want to make it perfectly clear that I do not see arbitration as a panacea. My experience with challenging PayPal worked out well for me (as it did one other time with a different corporation), but this is an n of one that may not be representative. It’s perfectly possible that my own experience was a total fluke. It’s perfectly possible that the entire arbitration process is a sham, as some studies suggest, meant to serve only as a fig leaf to shield companies from accountability. FIRE (Foundation for Individual Rights and Expression), the gold standard organization for defending freedom of expression, recently issued a statement on this topic where they specifically decry the lack of due process provided to users. I reached out to them and asked whether they considered arbitration resolution in their analysis, and what specific proposals they would suggest to improve due process, but they never responded to me.

I personally have mixed opinions about arbitration (“it’s complicated,” as a wise man once said), but the strongest criticism for me is its lack of transparency. Unless an enterprising researcher catches a lucky break, only the company defending against the claim knows how many times arbitration cases were initiated by their consumers and the outcome of each. Everyone else is left in the dark, and this serves only to further reinforce corporations’ power in this arena. In researching this topic and speaking to numerous people who work in arbitration-related fields, I could not identify any obvious structural reason why arbitration resolution could not be reliably used more often by spurned consumers seeking redress. The best explanation I can muster for the dearth of action in this arena is that the process looks too intimidating and the stakes are far too small for most people to bother.

This is all the more encouraging. I agree that capricious punishments by service providers is a threat to freedom of expression, but we have a pathway toward salvation. The current regime is entirely predicated on the (correct) assumption that almost nobody will bother challenging the system, but we can prove otherwise. I was apparently one of the only people on Earth crazy enough to read the terms of service and follow the instructions, but I hope that my example showcases how accessible the process is.

Now go forth, my children, let a thousand arbitration demand flowers bloom. And please, for the love of Allah, tell us how it goes.

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Yassine Meskhout is a contributing writer at Singal-Minded. You can read more about him here. Questions? Gripping tales of siccing the hounds of war against those who deployed them? Email him at ymeskhout@gmail.com or me at singalminded@gmail.com. The image of the author being a bad bitch and fearlessly taking on a powerful financial conglomerate was created with the help of Stable Diffusion.