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PayPal stumps up $5.2m to settle lawsuits

But doesn't admit guilt

eBay's PayPal payment division will pay $3.5m (about £1.9m) to consumers and $1.7m (£900,000) to 28 US states in settlements for two different actions regarding its notification of users regarding their rights, the company said yesterday.

The online payment company will establish a $3.5m settlement fund to conclude a class-action lawsuit filed in US District Court in Brooklyn, New York, in 2005. The settlement is still pending court approval. Consumers filed the suit on the basis that PayPal did not make clear its policies on certain types of transactions, the company said.

The firm will also pay $1.7m to the attorneys general of 28 states to settle suits there, stemming from similar investigations and complaints regarding its consumer protection and notification policies.

Under the terms of both settlements, PayPal is not required to admit guilt or wrongdoing, but must improve the policies and notification procedures in question.


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