Chinese PayPal users find accounts frozen or cleared   

大量中国跨境电商PayPal账户遭冻结 资金面临清零

(ECNS) -- The PayPal accounts of many Chinese businesses have been frozen and cleared due to suspected involvement in the trade of fake products, Beijing News reported on Tuesday.

A man surnamed Yang said his account has been frozen since December 9, with five years of savings worth 650,000 yuan ($103,942) inaccessible.

Yang said he had planned to buy a house with that money as down payment.

On November 16, 2014 a buyer from the US contacted Yang's brother, also in the foreign trade business, claiming to want to buy large quantities of men's gloves.The American requested a PayPal account to complete the transaction, but Yang's brother had none, so he used Yang's account instead. On December 10, the latter logged in to his PayPal account to find it frozen.

PayPal's customer service staff explained that an Illinois State court sent them a summons saying Yang might be violating the intellectual property right (IPR) of an American brand.

He later received a letter from Greer, Burns & Crain (GBC), a law firm, saying that a lawsuit had been filed against him by the brand owner.

The American buyer has not paid yet and the transaction is incomplete, Yang said.

It was added that he had contacted PayPal many times, hoping to have his account unfrozen, but to no avail and with PayPal saying that, as a third party, they must obey the law.

Yang suspected a picture of the glove he had downloaded and sent to the American caused the problem.

Many Chinese e-businesses have had the same experience: American buyers who claim to purchase counterfeits at high prices chat with Chinese sellers online, gain their PayPal account info and sue them based on their communication records. Due to high lawyer fees in the US, most sellers do not respond to the lawsuits and, as a result, their accounts are frozen and even cleared.

A member of a QQ group created to protect the rights of Chinese PayPal users said there are 134 people in their group who have been affected with $1,794,511 involved.

And this reflects just a small number; the PayPal accounts of numerous Chinese cross-border sellers have been frozen while they face lawsuits from brand owners who are deciding to crack down on fakes.

The PayPal accounts of a man surnamed Zheng was finally unfrozen on January 12 after he paid up to $9000 to an American Chinese lawyer who won a legal challenge on his behalf.

A man surnamed Wang, whose PayPal had also been frozen, said that hiring an attorney in the US is very expensive; they charge $400-500 an hour and a lawsuit could last for three months or even half a year, which means a whopping price to protect individual rights.

A merchant surnamed Wei found his money was gone from his PayPal account on January 20 because he did not respond to a lawsuit in time.

The money was transferred to the brand owner according to the court judgment, PayPal revealed.

Liu Yinliang, a professor from the Peking University Law School, said Chinese cross-border e-businesses should be proactive in responding to any lawsuits. As long as there is evidence that they never sold the kind of product in question before and that the products they are indeed selling are sourced from authorized channels, they could win the suits.

Zhao Zhanling, a researcher from the Center for IPR Studies at China University of Political Science and Law and an Internet lawyer, advised small and medium-sized Chinese enterprises, especially foreign trade firms, to increase their awareness of IPR protection and relevant foreign laws to protect themselves while not breaking the law.