They hold people's money a lot. Very profitable as they are essentially free overnight loans. Fuck PayPal. Anyone who does business with them is captive.
When a bank places a hold on a transaction or account for compliance review, the law state that those funds are to be held in an interest-bearing escrow account to be returned to the owner when the hold is lifted.
It’s illegal for PayPal to treat held funds as an overnight loan— that’s a gross misunderstanding of what is going on.
Look through the disclosures and agreements you signed on account opening and find out which banks PayPal is using for your account. The linked one above is for a deposit account at Synchrony Bank.
Do you have a PayPal account? If so, I assure you that you signed an agreement. The complaint in this class action lawsuit says that the agreement is a 65-page PDF. You would likely have signed it electronically by clicking an “I agree” checkbox.
