PayPal Credit Class Action Filed Over Failure to Disclose Terms

PayPal Credit ignores Maryland consumer protection law in its offers to arrange credit for online consumers, according to a recent class action lawsuit.

Plaintiff Lorenza Evans claims PayPal Credit’s offers of financing for online transactions are inadequate under Maryland laws that govern the provision of credit services.

She says that by failing to adequately disclose the full terms and conditions of these offers, PayPal Credit has lured a whole Class of consumers into obligations they were not reasonably led to expect.

PayPal Credit is the doing-business-as name of defendant Bill Me Later Inc. From its Maryland-based operations center, Evans says, PayPal Credit arranges for Comenity Capital Bank to extend lines of credit to cover online consumer transactions.

Evans says that during the checkout process for many different online retailers and other e-commerce transactions, PayPal Credit inserts its own advertisements offering the purchaser the option of paying for their purchase using credit secured through PayPal Credit.

Evans includes images of these solicitations in her PayPal Credit class action lawsuit. One solicitation shows an offer to arrange for 24 monthly payments with no interest on eBay purchases of $600 or more.

But these solicitations don’t tell the consumer the full story, Evans alleges. Not until after a consumer agrees to the terms as presented does PayPal Credit disclose the full terms and conditions of the deal – which Evans says require the consumer to pay previously undisclosed sums to Comenity Capital Bank.

Evans believes this practice violates Maryland consumer protection laws in several ways. By offering credit services to consumers, Evans argues, PayPal qualifies as a “credit service business” that is subject to the requirements of the Maryland Credit Service Business Act. This act governs the activities of businesses that, as a paid service, offer to help consumers seek extensions of credit.

Among the act’s most basic requirements is that to operate in Maryland, credit service businesses must be licensed as such and must put up a surety bond. PayPayl Credit has done neither, Evans claims, yet continues to offer credit services to Maryland consumers.

Evans says PayPal Credit’s ordinary business practices fail to satisfy several other Credit Service Business Act requirements.

Allegedly, PayPal Credit does not provide its customers with required written notice of their right to cancel the contract for credit services. Nor does the company provide basic notice of the services it would provide, the fee it would charge, and the customer’s right to certain information, according to Evans.

Evans describes PayPal Credit’s activities as a bait-and-switch. She claims that after luring consumers into relying on an offer of one type of credit transaction, PayPal Credit then alters the final terms to make them more profitable for themselves and their affiliates.

Evans is proposing to bring this action on behalf of a plaintiff Class that would cover all persons whom PayPal Credit contacted either directly or indirectly for the purpose of arranging an extension of credit with Comenity Capital Bank for consumer purposes.

She is asking the court to certify her proposed Class, name her as class representative and her attorney as class counsel. She seeks judgment in the proposed Class’s favor, disgorgement of profits gained in relation to the disputed activity, and an award of court costs and reasonable attorney’s fees.

Plaintiff’s counsel is attorney Philip R. Robinson of Consumer Law Center LLC.

The PayPal Credit Maryland Consumer Protection Violations Class Action Lawsuit is Lorenza Evans v. Bill Me Later Inc. d/b/a PayPal Credit, Case No. 1:17-cv-01784, in the U.S. District Court for the District of Maryland.