Bill Me Later hit with class-action lawsuit over interest rates
Baltimore Business Journal - by Scott Dance Staff - Friday, January 8, 2010
Bill Me Later is facing a class-action lawsuit claiming the online sales processor skirts California consumer protection laws to hike its interest rates.
Kyle Sawyer, a Bill Me Later customer in Torrance, Calif., filed the lawsuit Jan. 6 in U.S. District Court for the northern district of California. The complaint accuses Timonium-based Bill Me Later, a subsidiary of online auctioneer eBay Inc., of using a middleman to avoid California law prohibiting exorbitant credit penalties and interest rates.
The lawsuit seeks refunds of unjust fees and cancellation of loans for Bill Me Later customers in California. It also asks Bill Me Later and eBay to pay damages equal to three times the interest it charged Sawyer and any additional plaintiffs who join the lawsuit.
Bill Me Later is an online payment processor that Internet retailers use to boost sales. When making a purchase online, consumers who choose to use Bill Me Later undergo an instant credit check by the company, which it uses to decide whether to approve or deny the sale. If approved, Bill Me Later then foots the bill for the purchase and charges the customer like a credit card company would.
The lawsuit argues that Bill Me Later evades consumer protection laws because it isn’t a chartered bank or other financial institution. If it were, it would be subject to consumer protection laws limiting interest rates and penalty fees. (more)
Bill Me Later is facing a class-action lawsuit claiming the online sales processor skirts California consumer protection laws to hike its interest rates.
Kyle Sawyer, a Bill Me Later customer in Torrance, Calif., filed the lawsuit Jan. 6 in U.S. District Court for the northern district of California. The complaint accuses Timonium-based Bill Me Later, a subsidiary of online auctioneer eBay Inc., of using a middleman to avoid California law prohibiting exorbitant credit penalties and interest rates.
The lawsuit seeks refunds of unjust fees and cancellation of loans for Bill Me Later customers in California. It also asks Bill Me Later and eBay to pay damages equal to three times the interest it charged Sawyer and any additional plaintiffs who join the lawsuit.
Bill Me Later is an online payment processor that Internet retailers use to boost sales. When making a purchase online, consumers who choose to use Bill Me Later undergo an instant credit check by the company, which it uses to decide whether to approve or deny the sale. If approved, Bill Me Later then foots the bill for the purchase and charges the customer like a credit card company would.
The lawsuit argues that Bill Me Later evades consumer protection laws because it isn’t a chartered bank or other financial institution. If it were, it would be subject to consumer protection laws limiting interest rates and penalty fees. (more)
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