Stark Drive vs Paypal Inc Lawsuit (Spoiler alert: We Won)


The history between Paypal and Stark Drive

When we originally launched our crowdfunding campaign through our website after the tortious interference caused by our competitor on Indiegogo by Mate.bike whom use their lawyers to cancel our campaign on that platform, lawsuit still ongoing, we shifted our crowdfunding campaign to our own website to launch the original Stark Drive in April 2017. 

Our terms of backing were identical to those of platforms such as Indiegogo and Kickstarter with a donation and rewards based system. In fact, in order to process the payment, the backer would need to confirm their understanding of the crowdfunding system by clicking a checkbox at the last phase of the backing process before payment was processed.

Paypal renegs on their own Terms and Conditions

Paypal's terms and conditions on crowdfunding are exceptionally clear and have not changed since 2017 to the best of our knowledge, they do not cover 'not received' claims for any crowdfunding or donation based systems which is logical seeing as how there is no purchase actually being made, this is one way that bad actors are able to steal millions of dollars from hopeful and altruistic backers whom believe in campaign owners on such platforms.  Stark Drive is not one of those bad actors, although we have not been without unexpected situations that needed to be overcome over the course of our original launch. 

Stark Drive persevered and while it took us longer than expected to deliver our original first batch of bikes, we did deliver. Paypal whom we viewed as partner became yet another hindrance for us when they started to refund backers, whom had actually received their bikes eventually, even though they were later than anticipated, as well as limiting our account meaning that we suddenly had no ability to pay our suppliers as funds were frozen on their platform.

How to Sue a Global Company and Win?

Paypal is a US Based company as is Stark Drive.  We found the way to minimize risk for our company while still being able to take this behemoth to task for their (unscrupulous) behavior and how they harmed our company through small claims court.  While the limit in this court is fairly low, it does serve as a precedent and is prejudicial when a decision is reached.  Paypal tried to deflect the suit claiming that we were 'selling' bikes not crowdfunding them at the time, all over our website as well as the launch video on the site, it was clear that Stark Drive launched through crowdfunding.  Not only that but the payments would not be able to be processed without clicking the checkbox which appeared during our crowdfunding below:

The trial occurred via video conference due to the ongoing pandemic and after 7 hours of waiting for our turn to present our case and a 1 hour trial, Stark Drive was victorious in the eyes of the honorable Judge whom awarded us full damages as claimed in this case.  Paypals legal representation pulled out all the stops including trying to deflect the fact that we were clearly crowdfunding when we launched and instead pointing to other terms and conditions in their user agreement such as needing signature confirmation of delivery for 'purchases' over $750 as well as their own backend not registering the fact that we were crowdfunding in the data that was sent to them when the customer wished to complete their order, trying to deflect the fact that to even get to the stage where payment is processed the customer 'MUST' click on the checkbox agreeing that they understand this was crowdfunding. 

A very satisfactory result for Stark Drive and it goes to demonstrate that no matter if its a David vs Goliath situation, if you have the truth on your side you will prevail.  

Paypal: if you are reading this, we will be expecting payment for your loss shortly, our accounting team will be in touch. 


stark drive LLC.