PayPal Canada faces lawsuit over currency conversion fees

The signage outside PayPal's headquarters in San Jose, Calif on March 10, 2015. (AP Photo/Jeff Chiu)

A class action lawsuit has been filed against PayPal Canada on behalf of an Ontario man alleging that the online payments company charges Canadians hidden currency conversion fees, violating its user agreement.

Court documents filed to the Ontario Superior Court on Nov. 24 on behalf of Leonid Kaplan state that when PayPal Canada account holders wish to withdraw foreign currency from their accounts, the company unilaterally and automatically converts those funds to Canadian dollars.

The statement of claim says the conversions are not authorized by contract or otherwise and that PayPal Canada charges account holders an undisclosed fee to convert foreign currency on withdrawal as well as a percentage fee added to the exchange rate charged.

Toronto law firm Paliare Roland Rosenberg Rothstein LLP is representing Kaplan, who will bring a motion to the court seeking certification of the action as a class proceeding.

None of the allegations have been proven.

PayPal Canada did not immediately respond to requests for comments.