This is absolutely wild. In a just society this would be illegal. Why are we just hearing about this now? this is the most rot economy, rent-seeking behaviour imaginable.
PayPal has deep pockets, making it an ideal civil suit target. There are also 50 state AGs who might be interested in pursuing due to this potentially fraudulent activity.
It's wild how quickly online businesses went from exciting to shady and scammy.
Feels like 2003-2013 was a golden age for internet services.