Class Accuses EBay & PayPal of Deceptive Trade & Snooping

Monday, October 22, 2012 Last Update: 12:29 PM PT

SAN JOSE (CN) - EBay and PayPal plant privacy-invading spyware on customers' computers, and promise, but fail, to protect sellers from fraud, but unfairly insist "that the buyer is always right," a class action claims in Superior Court.
    

 Lead plaintiff Maggie Campbell sued eBay and its wholly owned payment processor, PayPal, in Santa Clara County Court.
    

 Campbell claims that eBay "has been able to force the eBay community of buyers and sellers, including the plaintiff, to adopt defendant PayPal Inc. as the preferred payment method."
     

The complaint continues: "Defendants PayPal and eBay represented to plaintiff and to other sellers similarly situated that they have automatic fraud screening and a seller protection policy that helps keep sellers and their customers safe from fraud. This representation, which was in writing on the website of both defendant PayPal Inc. and defendant eBay Inc. is false. Neither defendant PayPal Inc. nor defendant eBay Inc. has a system that protects sellers from the fraud of unscrupulous buyers. Instead, said defendants have a policy that the buyer is always right during a dispute between a buyer and a seller through the eBay/PayPal system. Sellers such as the plaintiff end up losing the goods that were shipped to the buyer, as well as the money paid by the buyer for the goods, which is refunded to the buyer by either PayPal or eBay."
    

 Campbell says she uses her eBay account to sell bicycles and bicycle parts. She claims that the defendants, "through their automatic fraud screening and seller protection software electronically place files in the computers of the plaintiff and other sellers similarly situated, which allows said defendants to spy on the activities of the plaintiff and other sellers similarly situated. Thus said defendants wrongfully invade the privacy of the plaintiff and other sellers by monitoring the computers of the plaintiff and other sellers similarly situated and surreptitiously obtain information as to what the plaintiff and other sellers and doing."
     

Campbell also claims that eBay tricks sellers into creating accounts by falsely representing that sellers "could list anything they wanted to on eBay for sale without any restrictions from eBay whatsoever. However, the foregoing representation turned out to be a false representation. After the plaintiff and other sellers sign an agreement with defendant eBay, only then do they discover the eBay has very strict restrictions upon what items can be listed for sale on eBay, the number of items that can be listed for sale on eBay, and restrictions on the category of documents that can be listed for sale on eBay. These severe restrictions on the listing of items for sale have damaged the plaintiff and other sellers because it substantially reduces the amount of revenue that the plaintiff and other sellers could realize if such severe restrictions did not exist."
    

   She also claims that eBay also forces buyers and sellers to use its website to communicate, allowing eBay to change people's messages to suit its purposes.
    

 "Defendant eBay, Inc. is known to delete language from a communication that it does not want the buyer or seller to read, or said defendant will add language that it does want the buyer or seller to read," the complaint states.
    

 Campbell claims that eBay "inevitably" settles disputes in favor of the buyer, but still charges sellers the listing price for the item, the transaction fee, and shipping charges
   

  She also complains that when a seller makes a sale free from dispute, PayPal retains control of the money for five days before its transfers it from the buyer's account to the seller's account.
     

She seeks restitution and class damages for breach of fiduciary duty and deceptive trade.
     She is represented by J. David Franklin with Franklin & Franklin in San Diego.