Paypal Agrees to Make Changes

Paypal has signed an agreement with the Attorneys General of 28 states which will hopefully provide members with more rights and better customer service. As explained by Maryland Attorney Genereal J. Joseph Curran, "The consumer has rights, and PayPal must explain those rights" According to the agreement PayPal must better explain the terms of their service and apprise the consumer of their various payment options.

According to the terms of the settlement, Paypal will:

• clearly disclose important terms and conditions at the time users enroll in PayPal and when users perform transactions using PayPal;
  
  
• disclose to the user at the time of purchase which funding source (for example, bank account or credit card) will be used and how the user can select an alternative funding source;
  
  
• give members a clear choice regarding what form of payment to use when making a purchase;
  
  
• provide explanations of the differences between its in-house PayPal dispute resolution programs and chargeback rights granted by federal law to consumers who use electronic banking, debit cards and credit cards to make payments and purchases;
  
  
• establish a conspicuous “Contact Us” link on all of its Webpages, provide a customer support number which is operational at least 18 hours each day during the week (14 on weekend days) and answer calls promptly (defined as within 5 minutes).

And according to Texas State Attorney General Greg Abbott:

The agreement also spells out new requirements for freezing customer accounts, including limiting access to funds only in such amounts as are deemed reasonably necessary to protect against risk. Prior to this agreement, PayPal would simply freeze the entire account.

It will be interesting to see what changes are made to Paypal's User Agreement, and if any changes will be made to the Acceptable Use Policy as well. It will also be interesting to see if new phone access will make it easier for customers to get their complaints dealt with in a reasonable manner.

And finally, part of the agreement says that the States will give Paypal 14 days written notice of any violations so that Paypal can deal with them before facing the possibility of being hauled into court again. So if you're in the U.S., it might be a good idea to download and save a copy of the agreement [PDF, 736kb], and if you have any problems with Paypal in the future, be sure and contact your state attorney general's office and let them know about it.