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PayPal Accused Of Favoring Buyers In Class-Action Lawsuit

LOS ANGELES ( — After using her vintage Louis Vuitton bag for a few years, Joanna Santiago decided it was time to try to make her money back.

"It's money sitting in a closet. So, why not be an adult and sell it?" Santiago asked.

She listed it on several online sites and eventually found a buyer who asked for a discounted price of $800, and she agreed.

"I could tell that she wanted it, just the same way I wanted it a few years ago," Santiago added.

Santiago shipped the bag. Two days later, she got a confirmation from the post office that it was delivered.

But the next business day, she was surprised to find an email from PayPal saying there was a dispute because the buyer claims she never got the bag.

Santiago said she emailed PayPal the tracking information. But the online payment company still sided with the buyer.

"I'm left now with a missing bag and PayPal withholding the money from me," she said.

Santiago's complaint is common among sellers. One wrote: "They will always side with the buyer." Another posted: "Sellers beware! PayPal focuses on buyers."

Anthony Ferrigno is a California lawyer who filed a class-action lawsuit claiming PayPal and its former parent company, Ebay, did not give sellers a fair shake in their dispute resolution.

That is in spite of the fact that PayPal's website promises world-class security for sellers. "They have a policy, we think, the buyer's almost always right, and the buyer almost always wins," Ferrigno said.

"When Ebay and PayPal promise that they are going to do what they can to protect the sellers and keep their money safe, they have a duty to do that in our view under the law," the attorney said.

Paypal disagrees. A company spokesperson told CBS2/KCAL9's Jeff Vaughn: "We've carefully reviewed the complaint and do not believe there is any merit to this lawsuit. We plan to vigorously defend ourselves."

Whatever the courts decide, Santiago said if she needs to sell something, she will find another way. "I'm done with PayPal," she said.

There are other options to sell items online. Facebook and Apple have rolled out payment systems.

If you have a story you would like Jeff Vaughn to look into, email him at or use the #CBSLA on Twitter.

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