PayPal settles with 28 state Attorneys Generals, settles New York class action

[Kristijntje]

Online-payment company PayPal Inc. has agreed to pay $5.2 million to settle separate claims with its customers, Washington state and 27 other states over concerns raised about deceptive business practices.

The Washington Attorney General's Office reported Thursday morning that PayPal -- which is owned by online-auction giant eBay -- agreed to clearly explain conditions and policies before a consumer becomes a PayPal member and each time a customer initiates a transaction...

The agreement with the states does not affect private class-action lawsuits in which PayPal has agreed to provide restitution to consumers...

Consumers alleged that while engaged in a dispute with PayPal, the company would freeze access to money in their PayPal accounts. Customers who expected to fund a payment through use of credit cards found instead that their bank accounts had been charged directly...

McKenna said the states' agreement requires PayPal to make several changes to its online payment service, including clearly and conspicuously disclosing all contractual terms and financial obligations. When PayPal members prepare to make a purchase, they will be presented with a clear choice whether to pay by credit card, debit card or electronic funds transfer.

The agreement also requires PayPal to provide clear access to Web pages explaining key differences between its in-house dispute resolution program and the rights granted by federal law to consumers who use electronic banking, debit cards and credit cards to make payments and purchases.

full article: http://seattlepi.nwsource.com/local/2868...l28ww.html

[Kristijntje]

Press release issued by PayPal:

PayPal today announced that it has signed an agreement with 28 United States Attorneys General. In this voluntary agreement, PayPal will, among other things, shorten and streamline its user agreement and communicate more information relating to its protection programs. PayPal has already complied with many of the terms in the agreement.

To cover the cost of the investigation, PayPal will pay $1.7 million to the Attorneys General. The Attorneys General involved in this agreement represent Alabama, Arizona, California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Vermont, Washington, and West Virginia.

PayPal also announced today that it has reached a preliminary settlement agreement with a proposed class of PayPal customers in an action pending in U.S. District Court in Brooklyn. The suit was filed in 2005 on behalf of a class alleging that PayPal did not clearly communicate information about its consumer protection programs related to specific types of transactions.

The settlement fund, which will be paid by PayPal, will total $3.5 million, less administrative costs and any amount awarded to plaintiffs' counsel by the court. The settlement will be presented for preliminary approval to the District Court in the coming months.

Under the terms of the settlement agreements, PayPal is not admitting any liability for any of the allegations in the two cases.

[Anita]

I posted the info on the SB.  Lots of familar faces showing up!

http://forums.ebay.com/db2/thread.jspa?threadID=2000231218&tstart=0&mod=1159492222018

Fun days... before eBay messed 'em up!

[mandy]

eBay's PayPal has some serious flaws and these are always an issue. I have not been personally burned, but it sure appears that there is account snooping and a definite risk of accounting hijacking. There are routine emails that get sent out as phishing attempts, and these are getting good enough that an active PayPal user or eBay user that is a little less than organized or a little more trusting could easily becoem a victim.

The company needs to be far more proactive in its pursuit of those who week to defraud PayPal and eBay users. The phishing attempts that started coming out in the spring of this year started the wave of complicated attempts to defraud. The company needs to routinely go after more of the criminals and publicize that they are out seeking them...

full article: http://ebay.bloggingstocks.com/2006/09/2...nd-paypal/