A recent The Recorder story by Alaina Lancaster, “Suit Claims PayPal Tramples Attorney-Client Privilege With 3rd-Party Access to Attorney Fees,” reports that a California legal professional has sued payment platform PayPal Inc. for violating attorney-client privilege by allowing credit card companies to reverse attorney fee transactions.

Todd White, a paralegal based in San Diego, has brought claims of breach of contract, fraud and unlawful business practices against the company after a client asked a credit card company to cancel the payment of attorney fees to White on PayPal, according to the complaint in the U.S. District Court for the Northern District of California.  The purchaser asked to rescind the charge, reporting “problems with the payment.”

White, who is representing himself in the litigation, said the canceled payment has strapped him with a $20 “chargeback fee” from PayPal and a negative balance of $116.73 in his account.  He alleges it is PayPal’s “customary business practice to provide another financial institution with unrestricted access on demand to funds already on deposit in the PayPal account which then grants them with ultimate authority for granting refunds of attorney’s fees.”

According to the complaint, PayPal does not provide the same financial protections to providers of services and digital goods as sellers of physical goods on the platform.  After reviewing White’s internal complaint, PayPal reviewed the situation again and “found no errors” in how the transaction was handled, White wrote.

The paralegal claims the San Jose, California-based company fraudulently asserted its user agreement complied with state laws while violating California’s mandates around unfair business practices.  White is asking for $75,000 in damages, as well as punitive damages.