TALLAHASSEE – LAWFUEL – US Law News – Attorney General Charlie Crist today announced that 28
states have reached an agreement with PayPal, Inc., resolving concerns
about the company’s payment systems. Today’s agreement requires the company
to provide adequate consumer protection to consumers before they subscribe
to the service and whenever they make payments to others using PayPal’s
system. Consumers have already received $9.2 million in restitution through
a previous class action lawsuit.
Crist’s office received more than 130 complaints about PayPal from
Florida consumers and launched an investigation in July 2003. The
complaints dealt with a variety of issues, including hidden fees for
sellers, misrepresentations about the terms and conditions of payment
methods, as well as problems with the default bank settings on the account,
which resulted in money being drawn directly from a consumer’s bank account
even if another payment source is preferred.
“Consumers should be comfortable that their money is secure and they
are treated as customers, not merely sources of revenue,” said Crist.
“Companies should go the extra mile to protect those who use their products
Today’s settlement ensures that PayPal spells out important terms and
conditions before a consumer becomes a PayPal member and when members
initiate transactions. The agreement also requires that whenever a PayPal
member gets ready to make a purchase he or she will be presented with a
clear choice regarding what form of payment to use. PayPal must provide
clear access to web pages containing important differences between its
in-house PayPal dispute resolution programs and chargeback rights granted
by federal law for consumers who use electronic banking, debit cards and
credit cards to make payments and purchases. Florida’s share of the $1.7
million in settlement funds is $144,500, which will reimburse taxpayers for
the costs of the investigation.
In addition to Florida, participating states are Alabama, Arizona,
California, Delaware, 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.
A copy of the PayPal settlement is available at: