TELECOM Digest OnLine - Sorted: PayPal Makes Settlement Deal With 28 States

PayPal Makes Settlement Deal With 28 States

Reuters News Wire (reuters@telecom-digest.org)
Thu, 28 Sep 2006 13:27:57 -0500

EBay Inc.'s (Nasdaq:EBAY - news) online payments unit, PayPal, has
signed an agreement with attorneys general from 28 U.S. states to
clarify how it notifies consumers of the measures it takes to protect
their financial data, the company said on Thursday.

Under the deal, PayPal will pay $1.7 million to the states.

PayPal said it will, among other things, shorten and streamline its
user agreement and communicate more information relating to its
protection programs. The company said it has already complied with
many of the voluntary deal's terms.

PayPal also said it reached a settlement in a proposed class action
lawsuit by PayPal customers in U.S. District Court in Brooklyn. The
company agreed to set up a settlement fund of $3.5 million, less court
and attorneys fees.

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

The state attorneys general involved in the deal 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.

The federal lawsuit 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 legal settlement will be presented for preliminary approval to the
U.S. District Court in the coming months.

Copyright 2006 Reuters Limited.

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