So, having PayPal problems?Sue PayPal in Small Claims Court...AND WIN!

You may not get Judge Judy to hear your case (but it might be worth a try to contact the show and see if you could), but there is a judge that will hear your case if you do the work you need to do to make it happen! You do not have to buy a book or pay somebody for advice on how to do this. is happy to provide you with the information that you need to Sue PayPal in Small Claims Court...AND WIN!

There are numerous advantages to doing this. First, every city in America has a small claims court. It is not difficult to find one or difficult to travel to.

Second, you do not need a lawyer. You do all the work yourself, including presenting your case in front of a judge.

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Third, you get a result the day you appear in court.

Fourth, it's cheap. The only fees associated with small claims court are the filing fees. While each jurisdiction is different, no jurisdiction has fees so high that the average person cannot afford to file a claim.

Fifth, you automatically win your case if PayPal does not send a representative.

Sixth, if the court rules in your favor you will have in hand a legal ruling signed by a judge ordering PayPal to honor the court's decision (that could mean unlimiting your account, refunding money back to you, allowing you access to your money, letting you withdraw the funds from your PayPal account or awarding you damages to compensate you for the losses you incurred as a result of PayPal's actions).

There are also disadvantages to doing this. First, you do the work yourself. That means you are going to have to gather your evidence and outline a case that you will present to the judge. In addition, you will have to serve PayPal to let them know they are being summoned to court. Don't worry! Every small claims court has precise instructions on how to initiate and manage your case from start to finish!

Second, you only have one shot to prove your case. If you are nervous, having a bad day on the day of the court appearance, if you forgot your paperwork at home, then game over. That means practicing in front of a mirror and going over your case backwards and forwards until you can do it in your sleep.

Third, you give up your right to appeal. If you loose the case, that's it. You cannot appeal the decision to a higher court (you can if you sue in a civil court -- but it costs much more and you need a lawyer for this).

Fourth, depending on your state, you can sue PayPal only up to a certain amount (amounts range from a low of $1,500 to $17,500 -- it depends on your state).

The bottom line is this: the main disadvantages are hard work and practice. If you are willing to do a little work, you will have success if you are on legally sound ground.

After you win your case, you can bask in the glow of your victory -- and in the glow of the media publicity that will come with it. There has only been one documented, confirmed case of a man taking PayPal to small claims court (he won).

Nobody else has had the courage or will to do it since. If you think the amount of money involved, and the amount of hassle and trouble that PayPal put you through is worth it, then sue PayPal in small claims court...AND WIN!

IMPORTANT: If you are serious about filing your claim against PayPal, be sure to read this section word-for-word.

Table of Contents

Why this Strategy Works

This strategy works for a couple of reasons.-- obvious reasons and reasons that might not be so obvious to you.

First, you take control away from PayPal. You are able to challenge PayPal in a court of law that is both neutral and fair towards both parties. If you are able to prove your case, you will win. It is as simple as that.

Second, when you and others start filing small claims cases against PayPal, it will force PayPal to resolve these issues as soon as possible. Why? First, the publicity. PayPal does not want that kind of publicity -- especially if they know they have a good chance of loosing. Second, PayPal has to pay very expensive lawyers to send to regions all around the country to deal with these cases (should they choose to show up). However, these very expensive lawyers have no experience in the small claims system. They are basically on par with your abilities and experience. As more people discover this strategy works, more suits will be filed. The cost alone of dealing with these small claims cases would be much higher than if PayPal just did the right thing and solved your problem. In other words, PayPal would rather make you "go away" than go to court.

Exhaust Your Options Before You Consider Small Claims

What does that mean? It means that you MUST try to solve your problem by dealing with PayPal first. It is important that you do everything PayPal asks in order to solve your problem (if you feel some demands are unreasonable, such as admitting to something that you did not do before PayPal will "solve" your problem, don't comply. Challenge that in court).

When you contact PayPal with your problem, PayPal will send you an email telling you this: if you want this problem solved, you must do A, B, and C. Therefore, they are in effect telling you to follow A, B, and C and your problem is fixed. However, with PayPal, that is often not the case. Customers do everything PayPal asks and then they do not get their problem solved.

When considering small claims court, you must do what PayPal asks. Why? First, PayPal cannot claim in their defense that you did not follow their instructions and that is the reason why the problem was not fixed. Second, you are able to build up evidence to use in court against PayPal.

Here is an example: You sold a gold coin on eBay for $300.00. The buyer paid you with his or her credit card through PayPal. After you sent the coin, the buyer filed a claim against you with PayPal saying they did not receive the coin.

You have evidence that the buyer DID receive the coin. PayPal limits your account and debits your account for $300.00 because of the chargeback.

You contact PayPal and outline what happened. PayPal replies that you must supply them with a tracking number and other information. You then contact PayPal and provide everything they asked -- or enough evidence that any reasonable person would conclude that the item was received by the buyer.

PayPal contacts you again and tells you your account will remain limited and the $300.00 will remain with the buyer.

You have now lost your gold coin and your money. PayPal dismissed you and refused to help you further.

You now have a case for small claims court.

Decide if Small Claims Court is Right For You

This is where you decide if small claims court is right for you. That means you have to ask yourself if you have case.

Having a case doesn't only mean having been wronged -- it means being able to PROVE with evidence that you have been wronged.

REMEMBER: "It's NOT what you know, it's WHAT you can prove."

(1) Decide if you have case that you can prove. Gather all your paperwork, copies, bank statements, or whatever else you need to prove your case. Sit down and write down what happened. Now take the evidence that you have and match it with your story.

Example: You write down, "Tom3487 a.k.a. John Smith purchased a coin from me on eBay." Okay, that means go to your paperwork and find copies of your eBay auction with the coin, the winner of the auction, and any other PayPal paperwork that might show this is the person who paid you.

And you continue on in that way. Each major piece of your story must be backed up by evidence. You cannot tell a judge you contacted PayPal and then not offer a copy of the email. If you tell the judge PayPal said this or that, you must offer the email showing what PayPal said.

(2) You need to find out if you even qualify for small claims court. The first -- and most important test -- is the amount that you are seeking to recover. The second test you will not have to worry about: Small claims courts primarily resolve small monetary disputes, and in a few states, evictions and restitution of property. No state allows you to use small claims court to file a divorce, guardianship, name change, or bankruptcy, or to ask for emergency relief (such as an injunction to stop someone from doing an illegal act). A few states also prohibit small claims suits based on libel, slander, false arrest, and a few other legal theories.

If your problem is PayPal related and it involves the loss of your money, you qualify.

The list below outlines the maximum limits in small claims court that you can sue for. If your amount is equal to or less than the amount for your state, you can sue PayPal in small claims court (if it is more, you cannot sue or you can sue, but only to that state's maximum amount. That means if your state allows $5,000, but you want $6,000 from PayPal you can still sue, but only for the $5,000).

IMPORTANT: CLICK on your STATE NAME to get information on how to file a small claims lawsuit against PayPal.

That information is specific TO YOUR STATE. It will give you step-by-step instructions on what to do. This guide here, at, will give you general instructions and strategies!

Small Claims Court Limits for the 50 States & Links to Your State's Small Claims Court


Dollar Limit

















District of Columbia










































New Hampshire


New Jersey


New Mexico


New York

$5,000 ($3,000 in town and village courts)

North Carolina


North Dakota










Rhode Island


South Carolina


South Dakota



$15,000 ($25,000 in Shelby and Anderson Counties)











West Virginia






If, after reading some information about your state's small claims court procedures, you feel small claims court is right for you then continue with this section in order to get ready!

Contact PayPal: Win Before You File Your Small Claims Case

After you have made the decision to sue PayPal in small claims court, a smart strategy would be to contact PayPal first. Why? The answer is simple. If PayPal believes that will actually file a case against them, they may give you want you want just to avoid having you file your case. If that happens, you will before you even file your case.

If PayPal does not respond to you, or if PayPal sends you a letter trying to scare you out of filing, IGNORE IT. PayPal may try to tell you that your court has no jurisdiction or that according to the User Agreement you "agreed" to, you cannot file a court claim. You cannot be punished by PayPal or the legal system for filing a small claims case against PayPal. The bottom line is they will try to scare you.

Is your right to file your claim. PayPal is not the law -- and you have every right to bring PayPal before the real law.

Here is what you need to do to contact PayPal on this matter:

(1) You must send your written letter to: PayPal Inc., Legal Department, 2211 North First Street, San Jose, CA 95131.

Tip: Send your letter REGISTERED with return receipt. Make sure you keep a copy of the letter you sent. When your registered mail receipt comes back in the mail (saying PayPal signed for your letter), make sure to place that card with the copy of your letter.

(2) Your letter should be type written, in the proper format, and ERROR FREE.

(3) The content of your letter should include the following: Why you are writing (You have contacted PayPal previously with a problem. Outline your problem. Outline the decision that PayPal gave to you and WHY you believe that to be wrong). What you are going to do next (Tell PayPal that because of their decision, they leave you no choice but to file a claim against them. Tell them the name of the court and the DATE you will be filing). End your letter (Tell them the next contact from you will be the summons to court).


Remember what I said: Before going to court, it's wise to send the other party a short, clear letter demanding payment. It may seem too good to be true, that a simple letter can result in the other side paying what you ask or agreeing to an acceptable compromise, but demand letters initiate a successful resolution in as many as one third of all potential disputes.

Most people who know they owe you money expect you won't pursue them. But things often change if you write a firm letter, called a demand letter, laying out the reasons why the other party owes you money and stating that if you fail to get satisfaction, you plan to go to small claims court. For the first time, the other party must confront the likelihood that you won't go away but plan to have your day in court. They must face the fact that they will have to expend time and energy to publicly defend their position.

How to Write a Demand Letter

1. Review the history of the dispute. At first this may seem a bit odd; after all, your opponent knows the story. But remember: If you end up in court, the letter can usually be presented to the judge, who doesn't know the facts of your dispute.

2. Be polite. You catch more flies with honey than by hitting them over the head with a mallet. Avoid personally attacking your adversary (even one who deserves it). The more disparaging you are, the more you invite the other person to respond in a similarly angry vein. Instead, you want the other person to adopt a business-like analysis:

With luck, the other party will decide it makes sense to compromise.

3. Ask for a specific resolution. For example, ask for a specific amount of money to be paid by a set date, or for the other person to do something specific, such as fix a botched home repair job.

4. Make it look professional. Use a computer or typewriter to write your demand letter. Keep a copy for you records.

5. Threaten the alternative of court. Conclude by stating that you will file a lawsuit if your demand is not met.

Sample Demand Letter


Tucker's Fix-It-Quick Garage
9938 Main St.
Chicago, IL 61390
July 1, 2007

Dear Mr. Tucker,

On February 15, 2006, I took my car to your garage for servicing. Shortly after picking it up the next day, the engine caught fire because of your failure to properly tighten the fuel line to the fuel injector. Fortunately, I was able to douse the fire without injury to myself.

As a direct result of the fire, I paid the ABC Garage $681 for necessary repair work. I enclose a copy of their invoice.

In addition, as a direct result of the fire, I was without the use of my car for three days and had to rent a car to get to work. I enclose a copy of an invoice for the rental cost of $145.

In a recent phone conversation, you claimed that the fire wasn't the result of your negligence and would have happened anyway. You also claimed that, even if it was your fault, I should have brought my car back to your garage so you could have fixed it at a lower cost.

As to the first issue, Peter Klein of the ABC Garage is prepared to testify in court that the fire occurred because the fuel line was not properly connected to the fuel injector.

Second, I had no obligation to return the car to you for further repair. I had the damage you caused repaired at a commercially reasonable price and am prepared to prove this with several higher estimates by other garages.

Please send me a check or money order for $826 on or before July 15. If I don't receive payment by that date, I'll promptly file this case in small claims court.

You may reach me during the day at 555-2857 or in the evenings until 9 p.m. at 555-8967.


Mary Jane Rotten Crotch

One of two things will happen here: PayPal will contact you saying they are sorry and the problem has been resolved in your favor. Or PayPal will send you a threatening letter telling you why you cannot file your claim. Ignore it and proceed with filing your small claims claim.

It is important that you contact PayPal. Doing so at this stage will give PayPal one last chance to fix your problem. You would be surprised to learn that this strategy works often -- but not always. You must be prepared to call your bluff and file your claim.

After you have filed your claim and PayPal has been served, do not be surprised to find out that PayPal will solve your problem at that point! PayPal will know for sure you are serious and might contact you to fix the problem!

That's TWO chances to win before you even see the inside of a courtroom!

Step 1: Gather Evidence

Whether you are a plaintiff (the person suing) or the defendant (person being sued), you need to back up your story with evidence. One of the best ways to prove your case is with letters or in-person testimony from eyewitnesses or expert witnesses. Depending on the facts of your case, you can also use photographs, advertisements falsely hyping a product or service, and written contracts to convince the judge you are right. Now let's into more specifics.

Gather and prepare your evidence in advance of going to small claims court.

TIP: Your evidence will do you NO good if the court refuses to accept your evidence on the grounds that it was improperly submitted. Check out YOUR STATE'S RULES OF EVIDENCE HERE.

Whether you are a plaintiff (the person suing) or the defendant (the person being sued), the key is to realize that it's what you bring with you to court to back up your story -- not what you say -- that determines whether you'll win or lose. This makes sense if you understand that the judge has no idea who you are and whether your oral (spoken) testimony is reliable. After all, your opponent is likely to claim that the "true story" is extremely different from your version.

In short, your chances of winning will greatly increase if you carefully collect and prepare your evidence. Depending on the facts of your case, a few of the evidentiary tools you can use to convince the judge you are right include:

Eyewitness Letters

Letters from eyewitnesses should first state who the witness is and then establish how, where, and when she saw (heard, smelled, or touched) important events or evidence. Here is a sample:

Presiding Judge
Small Claims Court
Kansas City, Kansas

Re: John Swift vs. Peter Petrakos
Small Claims Case No. 11478

Your Honor:

My name is Victor Van Cleve. I work at Racafrax Engineering in Kansas City, Kansas, as a mechanical engineer, and I am 43 years old.

On September 15, 20xx, I witnessed an auto accident a little after 7:30 a.m., involving John Swift and Peter Petrakos. I was about 50 feet away from the accident, standing at the intersection where the accident occurred, and I could see what happened clearly. I did not know either Mr. Swift or Mr. Petrakos before the accident.

I saw Mr. Petrakos' Toyota, which was heading north on South Dora, go through a red light and hit Mr. Swift's blue van, which was proceeding east on West 7th, well inside the 25 MPH speed limit. I assume the light was green facing Mr. Swift on West 7th because I was watching the red light on South Dora, waiting for it to change to green so that I could cross the street.


Victor Van Cleve

Of course, in a PayPal situation, you can have a letter from your bank saying that money was received or withdrawn by a certain person -- or PayPal took money out of your account. You must make your evidence SPECIFIC to your case.

Expert Witness Letters

Letters from expert witnesses -- such as the car mechanic who examined your car's engine or a remodeling contractor who inspected your poorly remodeled kitchen -- should first establish the expertise of the witness and then comment on the specifics of your situation. Here's an example:

Gail McClosky
47 Penrod Street
Helena, Montana
Sept. 30, 2007

Small Claims Division
Helena, Montana

Re: James Dills vs. R & B Construction
Small Claims Case No. 11478

Dear Judge:

I am a fully licensed contractor with 20 years' experience here in Helena (Contractor's License (4021B)). For the last ten years I've run my own five-person contracting company specializing in building enclosures and buildings to be used to house horses and other large animals. I enclose a resume outlining my specialized training and experience in this field.

On April 23, 20__, I was asked by James Dills to inspect several new stalls he had built in the main barn of his Lazy T Ranch by R&B Construction.

In my opinion these stalls are markedly below normal industry standards for three reasons.

  1. They are too small for the animals intended to be kept in them. [Continue with details.]
  2. Walls and doors are built of plywood too thin to safely contain an agitated animal. [Continue with details.]
  3. Construction is so rough in several regards as to pose a danger of injury to an animal intended to be kept there. [Continue with details.]

In conclusion, I believe the stalls are so poorly constructed they can't reasonably be upgraded to provide safe habitable housing for horses. Were they mine, I would rip them out and start over.


Gail McClosky

Although in-person testimony is usually best, letters can be effective if witnesses can't come to court. Most small claims courts will accept letters from witnesses, but check your local rules to be sure letters are allowed.

Again, this could be a letter or letters from you bank stating that in the expert opinion of your bank, PayPal should never have "......" you fill in the blanks.

Next, you should focus on some people that are able to come to court with you. It doesn't matter who you bring -- as long as they are able to truthfully testify as to what happened in your situation.

Don't worry if you think you do not need any witnesses. Witnesses only make your case stronger -- if you are able to prove your case without witnesses, expert letters or normal letters, then you may leave out such evidence.

After you have evaluated your need or non-need for witnesses, experts, and letters, you have to gather up the written evidence to prove the core of your case.

Again, each situation is different. Since you are making a case against PayPal, you will have to present some basic evidence.

First, you want to establish that you are the real owner of the PayPal account. Second, because each situation is unique, you must gather written evidence to prove the rest of your case.

In order to do this, you have to meet a standard. The standard is this: If you were to tell your story to a complete stranger, would they believe you?

In order for them to believe you, you have to have the evidence to back it up. For example, what if you talk to a stranger on the street and tell them you have $1 million in your checking account. Would they believe you? Probably not. What if you told them that and then showed them your ATM statement or bank statement? Would they believe you then? Yes they would.

The same is true with a small claims judge. If you tell the judge you are the owner of a PayPal account, you must show proof. If you tell the judge you shipped an item, you must show proof. If you tell the judge you contacted PayPal, you must show proof. If you tell the judge PayPal gave your customer a refund in spite of the fact that you proved to PayPal that such a refund is not justified, you must show proof.

I think you get the idea of where all of this is going.

To conclude, BEFORE YOU FILE, you must gather up your evidence that will prove your case.

Step 2: File Your Case With Your Local Court

You should have clicked on the link provided by this website that shows the details for your local small claims court. If you have not yet, click HERE.

The next step is to file your case with your small claims court. You must follow the instructions given to you by your local court. While each jurisdiction is different, the following will most likely apply:

You file your application and pay the court fee.

You -- or the court -- will send a summons to PayPal.

A trial date will be set.

Once all of this has been done, there is still more to do!

Step 3: Practice, Practice, Practice

You are not taking a trip to the grocery store. You are appearing in court in front of a judge. In addition, you might actually have PayPal's representative show up too. That is enough to make anybody nervous.

If you have all of the evidence that you need, there is no need to worry. However, "winging it" is not advisable. You need to practice your case so that you know it backwards and forwards.

When you appear in court, the judge is going to greet you and summarize what was written in your complaint. He or she will ask you to then elaborate. The spotlight is on you and you must make a good impression. If you appear very nervous, unprepared or not believable, the judge is going to take that into consideration.

What should you do to "practice?" First, have a written outline of your case prepared so you can follow it along step-by-step. List the various pieces of evidence that you have along with each point of your case. Here is an example:

(1) I am the owner of XYZ PayPal Account (Show judge copy of my account, PayPal emails showing the account is mine, etc.)

(2) I am the owner of XYZ eBay account (Show judge copy of my account, emails, etc.)

(3) On January 2, 2007 I listed and sold a gold coin on eBay (Show judge copy of auction, bidders, emails related to that purchase/auction)

And so fourth. Therefore, when you are in court explaining your story, you can use your outline as a guide to stay on track and lead the judge down your path of logic. You also use your reference sheet to see what evidence that you have available.

You need to keep in mind that the judge may interrupt you from time to time so that you can make clarifications or further explanations. If you feel like you have "lost your place," your reference sheet will help you get back on track.

The second thing you need to practice is your delivery. What is that?

You delivery is how you talk. Remember, you are going to be nervous. If you are nervous, you are not going to be "yourself." To eliminate that problem, or reduce it, it helps to practice what you want to say.

The classic way to practice is in front of a mirror. You stand there and you begin to talk. "Your honor, I am here to today because the defendant has caused me substantial harm. On January 5, 2007, I signed up for a PayPal account. Your Honor, here is a copy of the email showing I have a PayPal account....".

You want to practice your delivery -- that means trying to not sound "wooden" but conversational; it means controlling your voice volume; practicing what points you want to stress; matching hand gestures with what you are saying; and the overall package of your entire presentation.

After you have done this, practice in front of family members. Have somebody play the judge and play PayPal. Go through the whole case and try to make it as realistic as possible. Stop when there are problems. When you see a problem or a hole in your argument, write that down and come up with a way to solve that problem.

Your goal here is to take the new experience of going to court, and making it a not-so-new experience! By practicing, you are making your court appearance routine in your mind. So when the big day comes, it will be a cake walk.

You will be relaxed and confident. You will be ready for every argument thrown at you. In short, you will act like a winner.

To conclude, let's take a look at a "real" case: In this case, you were screwed by a hotel. Here is how your written outline and evidence would look like.

Remember, you want to impress the judge by keeping your comments and paperwork in good order.

Recap: In small claims court -- or for that matter any court -- it's essential that you organize what you have to say and the documents and/or other physical evidence you wish to show the judge. Do this by dividing your testimony into a list of the several main points you want to make. Under each heading, note any evidence you will bring to show the judge. If your evidence consists of a number of items, make sure that you put them in order and can find each item quickly.

Example of Plaintiff's Presentation

Let's assume your case is based on a hotel's failure to return your deposit when you canceled a wedding reception three months before the event was to be held. Your list of key points -- and the evidence to back them up -- might look like this:

Example of Defendant's Presentation

Because the defendant always goes second, Valley View's representative can't know in advance what the plaintiff will say and what evidence she will present. Thus, Valley View will need to adopt a little more flexible approach. Still, because Valley View representatives have probably talked to or exchanged letters with the plaintiff, they probably have a pretty good idea of what to expect. Accordingly, Valley View's list might look like this:

So there is a new dimension to all this! You must practice what you are going to say against PayPal's own arguments. If PayPal shows up, they will be prepared. But you have the element of surprise. First, they do not know what you are going to say or what evidence that you have. Second, PayPal will assume you are some looser who has not at all prepared for the case.

Play on that assumption and let PayPal come to court over confident. By practicing, you will show both the judge and PayPal that you are prepared and you are prepared to win!

Do not under estimate the power and importance of practice!

Step 4: Anticipate PayPal's Defense and Neutralize It

Now that you have outlined your case, it is also your job to anticipate and neutralize PayPal's case. What does that mean?

That means PayPal -- again if they show up -- will be putting on a defense. They will be trying to prove why you are wrong and why they do not owe you any money.

In most cases, PayPal is wrong and they know they are wrong -- that is why PayPal is so afraid of the justice system and go through great lengths to try to prevent you from going to court (read the PayPal User Agreement). Therefore, PayPal's defense may not even have anything to do with what you are alleging! PayPal may fight the charges based on the user agreement that you signed!

Lucky for you, if this is PayPal's defense, you will know about it long before you enter a courtroom. Remember when you contacted PayPal to tell them that you will be taking them to court should they not solve your problem ("Contact PayPal" section)? You should have (or will) receive a reply to the letter that you sent.

Again, the first contact that PayPal makes with you after you have sent them your letter could be a letter saying that they have solved your problem or a letter from PayPal saying that you cannot take them to court (and they will list their scary, big-worded reasons to you).

Should you receive a letter from PayPal discouraging you to go to court, you have, in effect, PayPal's defense strategy! Notice that PayPal is not telling why you are wrong and why they do not owe you the money -- PayPal is trying to scare you into taking them to court.

If PayPal can keep you out of court, then they win and you loose. Keep a copy of the letter. You will need it for court ("Your Honor, I gave PayPal one last chance to fix my problem. Instead of sending me a letter about my problem and what can be done about it, they sent me a letter trying to scare me out of coming to your court.")

Again, it is your right to take PayPal to court. Do not waiver or hesitate.

If you have a strong case (that is you have all your evidence and arguments in order), you do not have to worry about PayPal hurting you in court with that. If you are right, PayPal cannot prove that you are wrong. A strong case in your favor neutralizes PayPal's defense that they did you no harm.

The only other defense PayPal can use is jurisdiction: PayPal will argue that you agreed in the User Agreement to use binding arbitration for amounts under $10,000. If a judge agrees with PayPal, he or she will dismiss your case (without even hearing any evidence on your complaint).

You have a strong defense against PayPal's argument: First, a California judge ruled in 2003 that PayPal's binding arbitration clause is null and void. The judge ruled that the only reason PayPal included that section into the user agreement was to discourage customers from filing complaints against it. You can include a copy of that document to you judge. You can find a copy of that legal document on this website HERE.

Second, you can argue that the current User Agreement is also unfair and unfairly insulates PayPal from legal action. For your reference, you can find a copy of their current User Agreement HERE.

First, the fees for arbitration are over $150,00. Second, you do not get to pick who the arbitration service is -- PayPal does. PayPal might have a relationship with that company that you are not aware of, or a relationship with the very person who will be arbitrating your case. That means you are forced into a situation where the "card deck is stacked against you." Third, since you do not live in California, you would have to participate over the telephone. You have a legal right to confront your accuser. An effective defense cannot be presented over the telephone -- especially when PayPal will be there in person with the person arbitrating your case. PayPal has an unfair advantage.

Since you have a legal precedent to present the judge, he or she can rule in your favor that your case can continue (a legal precedent is a legal decision made by another judge in the past. Judges turn to these past decisions to justify their own decisions).

Another thing you want to take with you is a copy of PayPal's license to do business in your state -- you can get of copy of PayPal's license for your state HERE. This is important to take with you because you can make the following argument: PayPal has a license to do business in your state, and, as a resident of said state, you did business with them as a resident of your state. In other words, while PayPal is California based, they are also a state entity as well by virtue of the state license that they hold.

You must be prepared to counter PayPal's argument that the court has no jurisdiction. If you do, you take away all of PayPal's ammunition. They are left virtually defenseless.

Lastly, do not forget this possibility: Paypal may not even show up for your case. If that happens, you win automatically -- it will not matter that PayPal does not show up because they believe the court has no jurisdiction. Once you get a decision from the judge in your favor, PayPal will have to pay the judgment.

Step 5: The Day Before

The day before you must go to court, there are some things that you should do to prepare.

(1) Organize and store your court paperwork. You must make sure you do not forget everything you need for your court date. If you have a folder or a briefcase, pack all that stuff in the night before. You want to make sure you have all of your evidence (written items that prove your case, a copy of your case outline, a copy of the PayPal User Agreement, a copy of Judge Fogel's legal decision on PayPal's TOS, and a copy of PayPal's license for your state). Pack everything that you need -- even stuff that you are not sure of. It is better to have MORE than less. Additionally, you never know what the judge is going to ask for.

Second, if you have witnesses that you will be bringing with you, make sure you contact them and let them know exactly where to meet you. If you have children, and there is no school for some reason, it can be wise to bring them with you to court ("Your Honor, I've got kids to feed. Every cent helps. I can't afford to have some billion dollar corporation steal money from me." That could play off well with a judge).

(2) Bring a photo ID with you. You will need it at the court to prove who you are.

(3) Bring a notebook and a two pens so you can take notes during the court appearance. This is important if PayPal shows up -- you want to write down the points that PayPal is making so when it is your turn to speak again, you can counter those points one-by-one.

(3) Decide what you are going to wear. Dress as respectful as possible. Please do not show up to court in a tee-shirt and shorts. Jeans are off limits too. You don't have to wear a business suit to give off the appearance of respectability. As long as what you have is clean and semi-formal, it will do just fine.

In small claims court, judges go through the whole day looking at people who look like they are dressed for a picnic or baseball game. Judges notice -- and like it or not, appearance could count against you. If you look serious and look like your court appearance actually means something to you, the judge will reward you for it.

(4) If you have not visited your local court house yet, this might be the time to find out where it is. Go to Yahoo! or Google and get a map. Draw out directions from your house to the courthouse. You can't make it to court on time if you get lost or don't know where it is. Make sure there is adequate parking at the courthouse as well -- if there is not, be sure you know what the parking alternatives are before you arrive at court.

(5) Take an hour and go over your case again -- practice! After that, relax and get a good night of sleep. Showing up in court is tired and sluggish will hurt you when it comes time to present your case.

NOTE: As funny as this might sound, DO NOT BRING ANY WEAPONS WITH YOU TO COURT. You would be surprised with how many well intentioned knuckle heads forget this basic rule!

If you have a gun, a knife, mace, pepper spray, stun gun or other like object, do not take them with you to court. Leave them in your car or at home. You will be checked by court security before you are allowed into the main court areas.

Step 6: The Court Date

The big day has arrived and you are nervous. It is perfectly natural to be nervous and doubting yourself as to whether you made the right decision or not. Take a few deep breathes and jump out of bed.

If you drink coffee or something else with caffeine in it, double it for that morning. Caffeine is a great stimulant for brain activity and creativity (this whole website was built off of gallons of caffeine). Being a little "wired" up will help you in the long run to be mentally alert and fast on your feet.

Check again to make sure you have everything packed for your court appearance. Forgetting something could be deadly to proving your case.

Arrive at court at least 45 minutes before your scheduled time. This will allow you to not only find parking (if you need it), but it will allow you to register with the court and locate the courtroom that you will be in. If time allows, look over your paperwork once more -- make sure you know what documents are where. This way you can offer them to the judge quickly and without delay.

At your scheduled time, you will be called into the courtroom. You family members and witnesses (if you have any with you at that time) will be allowed in as well.

When you walk into the courtroom, take a place at the plaintiffs table (usually this is to your right as you are walking into the courtroom -- the judge's left).

Arrange your paperwork on the podium in front of you. Take a few deep breaths and concentrate only on the case.

NOTE: This is your chance to see if PayPal showed up. Look to your left. If the table is empty, there's a chance PayPal will not show up. However, you must wait until the judge actually calls the room to order before you can be 100% sure.

If the court is called to order, and no representative of PayPal's is there, congratulate yourself: you just won your case without opposition.

If there is a representative from PayPal to your left, breathe in and stay confident.

The judge will enter the court room and everybody will stand up. The judge will call the court to order and he or she will begin. The judge will first read off the case number and outline the case. Second, the judge will see if both parties are present.

Again, if PayPal is not present, you will win automatically. If PayPal is present, the judge will hear the case.

As you make your case, there are a few important points to remember:

(1) The judge is human. He or she has feelings and is influenced by them. If you come across as likable, believable and respectful, the judge will most certainly reward you for it. Play on the fact that the judge is human and not some robot without feelings. If the judge is friendly and humorous, you be friendly and humorous. If the judge appears no nonsense and logical, you make sure you come across as no nonsense and logical too.

(2) Always address the judge as "Your Honor." You do not have to say it with every sentence that you make, but as often as possible without sounding like a kiss ass.

(3) When you address the judge maintain eye contact. Do not look down or sideways -- look the judge in the eye and make your points. Avoiding eye contact is an indication of deception. The last thing you want is the judge thinking that you are lying.

(4) Don't interrupt. First, never interrupt the judge. Ever. Let the judge finish what he or she is saying. Do not address the judge unless you are invited to. Second, while emotions might be running high, DO NOT INTERUPT PayPal when he or she is speaking. Have your notebook at the ready and write down the points that you want to make later when it is your turn again. You will come off as professional and respectful.

While you are in a courtroom, the proceedings will not be as formal as you think. You will have your turn to speak just like PayPal will have his or her turn. However, there will be a lot of back and fourth as the judge gets down the bottom of things. The judge might be talking to you at one point and then ask PayPal a question right after. When there, you will get the feel for how everything is working.

Finally, back the "nervousness" issue: In spite of all the preparations that you have made for your big day, you will be nervous. That is natural. There is one thing that you can trust me on and that is this: The nervousness will reach a peak before you say a word. After the first words come out of your mouth, your nervousness will disappear almost instantly. As you get "warmed up," the practice that spend time on will take over. In the end, you will do fine.

At some point the judge will ask both parties if they have anything to add. This is a good indication that the judge wants to make a decision. It is your choice as to whether you want to say anything or not. If you think the case has not gone well for you, this might be the chance you need to recover.

If you think the case has gone well for you, you can say, "No Your Honor, I have nothing to add at this time."

You will get a decision on the spot -- or the judge will adjourn to chambers and return with a decision.

Whatever that decision is, both parties will then have to sign certain documents. If you are the winner, PayPal will receive the judge's ruling along with a deadline to comply with the ruling.

Congratulations, you have just sued PayPal...AND WON!

What if Paypal Sends a Lawyer?

You are entitled to have an attorney in formal court, where small claims court cases are heard. But because by definition your small claims case is not worth big bucks, you will probably decide it is not wise to hire one. But what if your opponent hires a lawyer? Aren't you at a disadvantage if you represent yourself?

Not necessarily. In all states, small claims courts must follow informal rules. This places you on a relatively equal footing with your opponent, even if your opponent has a lawyer.

If you still feel a little intimidated, the best cure is to go to the courthouse and watch a few small claims cases. Ask the court clerk when they are scheduled. Lawyers cannot pull fancy tricks or other complex things in small claims court. The judge will just roll his or her eyes and remind PayPal's lawyer where he or she actually is right now.

Can I bring a Lawyer With Me to Small Claims Court?

In a handful of states, including California, Michigan, and Nebraska, you must appear in small claims court on your own. In most states, however, you can be represented by a lawyer if you like. But even where it's allowed, hiring a lawyer is rarely cost efficient. Most lawyers charge too much compared to the relatively modest amounts of money involved in small claims disputes.

Interestingly, several studies show that people who represent themselves in small claims cases usually do just as well as those who have a lawyer.

However if you have a family member or a friend who is an attorney -- and will represent you for free -- it is an option that you can consider.

Feedback & Questions:

Contact before your case if you have any questions. Contact to tell us about your case -- we will post a new section for those who have taken PayPal to Court. This website is not only here to suggest what to do, we are here to SUPPORT you as well. If there is any advice or suggestions that we can offer, feel free to CONTACT US!

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