1) I agree, settling a basic lawsuit doesn't mean you are the "loser" necessarily, sometimes it simply is the smarter choice over spending money on attorneys and wasting a lot of valuable time. However, two big differences in this case. 1. A judge reviewed and granted a class action status to this suit which meant s/he felt there was enough evidence that a jury could conclude that Paypal was wrong and that there were significantly enough people "injured" to warrant a class action status. 2. When a company settles to reduce risk, they almost never admit anything or pay damages to the class. They may pay court costs and agree to make non-material changes, but essentially they are just capitalizing the small risk to reduce paying attorney's fees etc. On the contrary here though, when a company agrees to change their TOS in a material way and pay damages to the entire class, it is not a minor thing and it is a signal that they also felt the risk was reasonably substantial.

2) I am glad you have such great success with Paypal. But it isn't the truth for others, so being righteous and saying other people must be doing something wrong or illegal is just really out of touch.

3. False. The truth is simple, when product sells it has to be replaced so it is available for the next order. If demand is rising it has to be replaced in greater quantities to keep up. So yes, product is going out the door, but now there are reorder points to fulfill to maintain inventory and satisfy new orders, shipping bills which must be paid, employee wages, sales tax to governments, employment taxes, rent, insurance etc, all which must be paid well before the 180 days are up. So if money is being needlessly held for long periods, a business can easily be put in jeopardy. Most e-commerce companies don't run on huge margins, so they do not have 12 months reserves saved to work from, which is essentially what it takes if they get a 6 month hold put on their funds. Worse, if they are really growing it will take much more then 12 months of reserves, which was true for a number of the business I was working with. And no, bank loans (or even factoring) to replace/purchase product are not "easy", "fast" or "low cost" for a small business, even with proven sales traction and new orders coming in. Instead these loans are generally treated as moderately high to high risk.

My point about Paypal and their offering loans to the same people whom have had funds held, stands separately and on its own. It is a horrid business practice and while not illegal that I can imagine, it sure does seem immoral. Again, I do not know if they are still doing this today, but you can search google and find examples within the last year of it taking place.

I really do hope you continue to have success with Paypal and your business. I also hope Paypal stops their "held funds" behavior as it relates to small businesses and give people their funds timely. I do not think it is too much to ask, banks and other clearing houses do it everyday and still provide solid fraud protection for everyone involved. As for anyone who asks me, I will continue to steer them to any provider other than Paypal, until I see that Paypal has made a change in reality not just in media speak.