PayPal is paying, making a $1.7 million settlement deal with 28 s...
PayPal is paying, making a $1.7 million settlement deal with 28 state attorneys general, resolving consumer complaints about the eBay-owned payment processor’s practices. PayPal also reached a preliminary settlement in a proposed class-action suit. Under the AG pact the…
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company will “shorten and streamline” its user agreement and better inform users of its financial protection programs, the company said, claiming it already complies with “many” agreement provisions. Consumers said PayPal would freeze their funds in any disputes, directly charging their bank accounts without notice. The settlement stipulates that PayPal will ask users before purchases whether they want to pay by credit or debit card or electronic funds transfer. PayPal also must provide “clear access” to its Web pages detailing how its in-house dispute resolution system works compared to consumers’ federally mandated “chargeback rights,” said the Wash. state AG office, one of 4 to pursue PayPal starting in 2003. “Under this agreement, consumers will no longer have to click through multiple hyperlinks to get critical information about their financial transactions,” Wash. AG Rob McKenna (R) said. Other participating states are Ala., Ariz., Cal., Del., Fla., Ga., Hawaii, Ill., Ind., Ia., La., Md., Minn., Miss., Neb., Nev., N.J., N.Y., N.C., Ohio, Okla., Ore., S.D., Tenn., Tex., Vt. and W.Va. The preliminary settlement with proposed class members in U.S. Dist. Court, Brooklyn, which includes a $3.5 million fund minus administrative and plaintiffs’ legal costs, will be evaluated by the court in the coming months, PayPal said. Those customers sued in 2005 alleging PayPal didn’t clearly explain its consumer protection programs. The company admitted no liability in either settlement.