They can sue. The question is, can they prevail. I'm reviewing the paypal contract and am trying to discern where their action is permitted.
I also sent paypal an email stating that because the have shown themselves to NOT be a reliable funds transfer agent, I am ceasing to use them.
Of course, they didn't accept the email
"Thank you for contacting PayPal Customer Service.
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Original Email:
Gentlemen:
I happened to notice the news story below. Since it appears PayPal is not a reliable payment transfer source, please be advised I will not use paypal until its reliability can be assured. I hope the vendor in question decides to litigate this matter.
"Captain Sim, as a qualified PayPal World Seller, relied on their payment system since 2001. With the release of the 'Legendary C-130', there was a major increase in earnings, which seems to have raised a flag for PayPal.
As
a result, Captain Sim's account was frozen for 180 days, and they were given two options: 1. Wait until the investigation process is completed or 2.
Refund all costumers and ask for a re-purchase.
Since a big part of the 'Legendary C-130' sales were made though PayPal and PayPal has no plan to pay them in 6 months, Captain Sim has gone with the "full refund and re-purchase" option. Every costumer who have paid them via PayPal from noon GMT of the 12 Oct '05 to the noon GMT of the 22 Oct '05 should receive an e-mail with further instructions on how to re-purchase (using a more reliable system).""
CrashGordon
CEO, Omega-Air Virtual airlines