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PayPal Settles Suits For $5.2M

Online payment specialist PayPal agreed to pay $5.2 million to settle two class-action suits and pledged to better explain how it protects users' financial data.

PayPal, a unit of eBay since 2002, said in a statement it reached a preliminary settlement deal to pay customers $3.5 million in a class-action suit filed in U.S. District Court in Brooklyn last year.

The suit alleging that PayPal did not clearly communicate information about its consumer protection programs related to specific types of transactions.

The settlement will be presented for preliminary approval to the district court in the coming months.

In the second suit, the popular online payment unit of eBay will pay the attorneys general of 28 states $1.7 million, and promised to "shorten and streamline its user agreement and communicate more information relating to its protection programs."

The attorneys general involved in this deal represent: Alabama, Arizona, California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Vermont, Washington, and West Virginia.

As part of the agreements, PayPal does not admit liability for any of the allegations.