Kindhearted folks who have made charitable donations via PayPal’s Giving Fund platform may have had their funds diverted, according to a lawsuit filed in a Chicago court this week.
The federal class-action suit was brought by Chicago resident Terry Kass. She first used the online service last year after receiving an email from PayPal that promised to add an additional 1 percent to any donations, the Guardian reported.
Incentivized by the message, Kass searched the service’s listed charities before settling on a mix of 13 local and national organizations to which she donated a total of $3,250. However, when she happened to contact one of them a while later, she was told her financial gift hadn’t showed up. After looking into the matter, Kass discovered that although the charities had been listed on the PayPal Giving Fund site, 10 out of the 13 were not registered with
The suit claims that PayPal failed to inform Kass that many of her donations never reached their intended destination, and that
It certainly seems that many organizations could be missing out on potentially vital funds. After all, PayPal Giving Fund encourages people to “choose from over a million charities,” but the suit points out that, according to PayPal’s own data published in 2015, only 29,000 charities had at that time registered with the service.
In cases where the organization fails to register, it may be that givers would rather have their funds returned so they can make the donation in person rather than have their money sent to a charity they didn’t choose. But it seems the donor is never given that opportunity.
Representing Kass, attorney Chris Dore told the Guardian, “There are thousands of people out there who believe that their money has gone where it’s supposed to go. Most people will never find out that their money never got where it was supposed to go and the organizations are none the wiser, either.”
The lawsuit alleges that “as a general practice,” unregistered charities don’t receive any contact from PayPal Giving Fund about donations being held for them, despite
The suit presents the idea that, in instances where it does make contact, PayPal’s plan is to “force charitable organizations that might not have otherwise created PayPal business accounts to open and utilize such accounts in their daily business, thus generating revenues for PayPal” via the fees that the company imposes on transactions.
In a statement, PayPal said it “only recently became aware of this filing” and that it was “reviewing the contents.” It added: “
[Updated on March 2 with a more expansive statement from PayPal:]
“PayPal recently became aware of this filing related to our holiday giving campaign and we are reviewing the contents. To be clear,
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