UPDATE: The Consumerist has posted a template you can use for your opt-out letter. Furthermore, the Consumerist article says that eBay just did the same thing as PayPal, and you need to send a letter to opt out of that one as well. There’s a link in the article to a template for the eBay letter as well. Do it!
I just received a notification from PayPal that they are adding mandatory arbitration to their user agreement:
You will, with limited exception, be required to submit claims you have against PayPal to binding and final arbitration, unless you opt out of the Agreement to Arbitrate (Section 14.3) by December 1, 2012. Unless you opt out: (1) you will only be permitted to pursue claims against PayPal on an individual basis, not as a plaintiff or class member in any class or representative action or proceeding and (2) you will only be permitted to seek relief (including monetary, injunctive, and declaratory relief) on an individual basis.
The emphasis is theirs.
Most of the time, when a service provider adds an arbitration clause to their terms of service, they tell you it’s their way or the highway, i.e., if you aren’t willing to agree to the clause, your only choice is to close your account. But PayPal is actually offering users the option of rejecting the arbitration clause while continuing to use PayPal. I don’t know why they’re doing that, but I’m glad!
You can, and should, opt out if this clause. Here’s how to do that (from here, visited October 10, 2012):
You can choose to reject this Agreement to Arbitrate (“opt out”) by mailing us a written opt-out notice (“Opt-Out Notice”). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131.
The Opt-Out Notice must state that you do not agree to this Agreement to Arbitrate and must include your name, address, phone number, and the email address(es) used to log in to the PayPal account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of the User Agreement, including all other provisions of Section 14 (Disputes with PayPal), will continue to apply. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.