KNOXVILLE, Tennessee (WATE) – A young woman from Knox County is suing PayPal because she wants to know why the online payment company has frozen its money for more than a year. The money sent directly to PayPal came from her unemployment benefits, earned at the start of the pandemic because she couldn’t work. So far, there have been two pre-trial hearings in this case and more are scheduled.
Some people don’t have a checking account. Instead, they create a direct deposit account with PayPal, receive a debit card, and use it like a checking account. That’s what Sheena Small did last year. She had two jobs, but due to the virus they were both made redundant and at the time she was expecting a baby. Well, shortly after opening the PayPal account it was unexpectedly frozen.
Sheena Small says she has been living financially on the edge for over a year. In the spring of 2020, she lost her job due to the pandemic. She was eligible for state and federal unemployment, but did not have a checking account. It was then that she saw an ad from PayPal.
“Use direct deposit for government payments and salaries,” she said. “You didn’t have to wait for it, it was just headed in there. You can use it right away.
Shortly after applying and being accepted last year, she received a debit card from PayPay and within days, over $ 7,000 in unemployment money was loaded into the account, and she started. to use it. “It seemed quick and easy until they froze my account on July 5th. They never explained to me why they did it.
Small said for weeks that she texted and called PayPal to ask when the account would be released: “I never heard from anyone. What was the reason they were withholding my funds, why was my account frozen? And then a message came telling me that they were going to hold my funds for 180 days.
Without access to her money and her about to be born baby, her bills went up. To make ends meet, Sheena reluctantly took out a title loan with very high interest rates. Then, in January of this year, PayPal informed Sheena that they were blocking her account for an additional 180 days.
“I said ‘what for?’ They said ‘we don’t have this information in front of us’.
In early July, she hired Knoxville lawyer Bennett Hirschhorn. He filed a lawsuit against PayPal, alleging breach of fiduciary duty and breach of contract. Within days of filing the complaint, PayPal deposited $ 4,400 into Small’s new bank account with TVA Credit Union.
In court sessions last week, a preliminary hearing for the case established that PayPal’s attorney will be able to testify remotely via video. Ms Small’s attorney says he wants PayPal to answer some questions about his client’s deposit.
Hirschhorn said, “How was the account managed? What policies allowed them to hold the funds for more than a year? What policies, if any, allowed them to hold the funds without giving the reasons they were held or how you can get them released? “
WATE 6 On Your Side contacted PayPal, we were told the company is not commenting on pending disputes. In court, PayPal’s attorney told Judge Chuck Cerny that the company will need time to put together documents. The jury date has not been set.
Small and his lawyer aren’t trying to break the bank with PayPal, they’re suing for $ 25,000. If she wins, that would be enough money to pay legal fees and costs and to pay off her debt to the securities lender.