The fee structure of eBay Inc.’s Bill Me Later instant credit service might violate a consumer-protection law in California, Hagens Berman Sobol Shapiro LLP alleges. The Seattle-based law firm last week said it filed a lawsuit against the San Jose, Calif.-based company on behalf of consumers and is seeking class-action status.
The law firm, which has an office in San Francisco, alleges that Bill Me Later has been charging fees in excess of what is allowed under California consumer-protection laws. California law requires nonbanks to cap any interest at 10%, but Bill Me Later’s fees push that rate above 100%, the lawsuit contends.
Bill Me Later’s agreement with CIT Group Inc. to provide banking services does not excuse it from California laws, attorney Steve Berman stated in a press release Wednesday. “Bill Me Later, not CIT, is making the decisions whether to grant consumers’ loan requests and (is) funding those loans,” Berman said.
A spokeswoman for PayPal Inc., the eBay unit that offers Bill Me Later, says the company does not comment on litigation. PayPal bought Bill Me Later last year after PayPal’s own instant credit offering, Pay Later, failed to find a wide audience.
