NEWARK
- PayPal, Inc. has agreed to clearly disclose
all contractual terms and financial obligations
to consumers before they become members
and whenever they make payments to others
using PayPal’s system, under a multi-state
settlement to resolve consumers complaints,
Attorney General Stuart Rabner and Acting
Consumer Affairs Director Stephen B. Nolan
announced.
“As
our retail marketplace becomes even more
technologically advanced, it is critical
that consumers be able to trust those companies
they rely on when doing business on-line,”
said Attorney General Stuart Rabner. “With
this agreement, PayPal will change its business
practices to protect consumers.”
PayPal represents a relatively new type
of web-based alternative payment system.
This system provides online services with
which members can transfer money to other
people or businesses. PayPal is used predominantly
for on-line auctions or other business purchases,
but can be used to transfer money between
individuals.
To date, the Division of Consumer Affairs
received 30 complaints about PayPal. The
complaints allege that PayPal would freeze
money held in the consumer’s PayPal
accounts during (billing/payment) disputes
and charge credit cards directly without
consumer permission.
“The bottom line is this: consumers
should not be forced to jump through hoops
- or multiple hyperlinks - to get the information
they need to make an informed decision regarding
an on-line purchase or money transfer,”
said Acting Director Nolan.
Under
the terms of the settlement, PayPal has
agreed to:
-
detail important terms and conditions
before a consumer becomes a PayPal member
and each time a member initiates a transaction;
- make
information more accessible to users by
changing the way PayPal uses hyperlinks
and multi-page documents;
-
present the consumer with a clear choice
regarding what form of payment to use,
such as credit card, debit card or electronic
funds transfer from a bank account, each
time a PayPal member gets ready to make
a purchase;
-
provide clear access to web pages containing
important differences between its in-house
PayPal dispute resolution programs and
charge back rights granted by federal
law to consumers who use electronic banking,
debit cards and credit cards to make payments
and purchases.
New
Jersey joined with the Illinois Attorney
General’s office and 26 other states
to enter into this settlement with PayPal,
which has denied any wrongdoing.
Deputy Attorney General Geoffrey R. Gersten
represented New Jersey in this matter.
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