Posted by Tamara
West Virginia Attorney General Darrell V. McGraw, Jr., recently announced that the state of West Virginia has reached an agreement with Paypal, Inc. to resolve an investigation into the company’s business practices. In addition to changing its business practices, Paypal will make a voluntary payment to West Virginia and the other 27 states involved in the investigation in the total amount of $1.7 million. West Virginia will receive $59,500 as its share of the settlement.
The settlement comes amid allegations by some that the financial internet services company was operating in violation of West Virginia fraud laws. Paypal, Inc. is an internet-based company that facilitates the transfer of money between individuals and companies via the Internet. Paypal is commonly used by people participating in online auctions such as eBay or Yahoo Auctions. It is also used by individuals making internet purchases who prefer not to pay by credit or debit card.
Since 2000, West Virginia Attorney General McGraw’s Consumer Protection Division has received numerous complaints about Paypal raising concerns ranging from payments being “frozen,” to incorrect accounts being charged. Apparently, while disputes were in process, Paypal would freeze the account, often preventing access to hundreds of dollars of the customer’s money.
At other times, customers found that their bank account was debited for Paypal fees, instead of the credit card given.
“With the Internet becoming more important to the nation’s economy, it is critical that companies such as Paypal comply with the consumer protection laws,” said Attorney General McGraw. “I am heartened by Paypal’s agreement to change its business practices without West Virginia or other states being forced to litigate.”
Among other things, Paypal is agreeing to provide better notice regarding terms and conditions for using its payment services. Consumers also will be given a clear choice regarding what form of payment to use such as credit cards, debit cards, or electronic funds transfer between bank accounts. Additionally, consumers will no longer be required to click through multiple pages or screens before locating important information.
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