PayPal Customer Account Freeze Lawsuit Sent to Arbitration

PayPal Holdings Inc. customers who accused the digital payment platform of violating racketeering laws by freezing their accounts with no explanation must first try to resolve the dispute in arbitration.

The customers are bound by the company’s User Agreement, which requires disputes to be resolved individually in arbitration, US District Judge Beth Labson Freeman in San Jose, California, ruled Thursday.

“The court finds it important to note that plaintiffs could have opted out of the arbitration provision,” the judge wrote.

PayPal allows new customers to opt out of the arbitration clause by mailing in a form within 30 days of ...