If you have a dispute with PayPal, you cannot sue them in court or join a class action lawsuit — you must resolve the dispute one-on-one through a private arbitration process.
The arbitration provision was significantly shortened and simplified, removing the detailed explanation of class action waiver implications and reference to a separate arbitration agreement.
View full change record →This clause eliminates your right to a jury trial and to participate in class action lawsuits against PayPal, meaning if PayPal wrongly freezes your funds or charges you an improper fee, your only recourse is expensive individual arbitration. You have exactly 30 days from first accepting the agreement to opt out of this clause by sending written notice to PayPal.
Cross-platform context
See how other platforms handle Mandatory Individual Arbitration and similar clauses.
Compare across platforms →Mandatory arbitration prevents consumers from banding together in class actions, which are often the only economically viable way to pursue small-dollar claims against a large company like PayPal.
(1) REGULATORY FRAMEWORK: This provision implicates the Federal Arbitration Act (FAA, 9 U.S.C. § 1 et seq.), which generally preempts state law challenges to arbitration agreements. However, California's McGill rule (McGill v. Citibank, N.A., 2 Cal.5th 945 (2017)) holds that arbitration clauses cannot waive the right to seek public injunctive relief in any forum — creating residual class-like exposure. The CFPB has previously attempted rulemaking to restrict mandatory arbitration in consumer financial products (finalized 2017, overturned by Congress); enforcement authority rests with the CFPB and FTC under Section 5 of the FTC Act. (2)
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