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eBay sellers file billing suit

Auction site faces class-action suit from members angered by problem with its billing system.

A pair of eBay members have initiated a class-action suit against the online auctioneer over a problem with the company's latest billing system.

The two eBay members filed the claim on Friday, alleging that eBay failed to address problems with a billing tool that overcharged individuals selling items on its site. In the suit, brought in California Superior Court, eBay members Robert Cerreta and Nancy Spaulding contend that the online auction host double-billed their user accounts after launching a new payment processing system in February.

According to the complaint, Cerreta and Spaulding, who hail from Florida and Ohio, respectively, were charged twice the amount they actually owed eBay for handling auctions of goods they were selling. The eBay users assert that the funds were then inappropriately drawn from bank accounts and credit cards they had registered with the company. In addition, the two customers said that eBay threatened to suspend their user accounts over the disputed charges.

An eBay representative said late Wednesday that the company has yet to be officially served with the suit and declined to comment on the claims.

However, company executives have already apologized publicly for the billing issue. In mid-June, General Manager Jeff Jordan told attendees at the company's user conference that eBay had discovered the double-billing issue, fixed the problem and was in the process of addressing credit issues that had resulted from the gaffe. Jordan acknowledged in a speech that eBay had let its customers down, and he promised that the company would be more careful in launching a new search tool that is one of the company's forthcoming technological improvements.

The billing problem was first aired in the company's own online user forums. eBay's billing team eventually posted messages to the discussion area, pledging to fix the issue and help customers address any mistakes.

While neither Cerreta nor Spaulding was charged large amounts of money as a result of the glitch--each was overcharged about $20--the customers maintain that eBay's payment system also rounds up the dollar amounts it charges sellers without telling them it does so. For instance, they said, eBay now rounds a bill of $30.78 up to $30.80. Despite the fact that the system tacks on only a few cents to each transaction, the customers said the additional charges add up over time.

In the suit, Spaulding also said she was threatened with jail when she attempted to protest outside the user conference, which was held in New Orleans. A copy of the lawsuit has been published on the Web site of the law firm that the two eBay members are using, Fazio & Micheletti, of San Mateo, Calif.

In related news, eBay's PayPal unit recently reached a settlement with customers who accused the company of illegally freezing their funds. As a result, PayPal said it would pay a total of $9.25 million to settle the federal class-action suit, $3.4 million of which would go to paying its customers' legal fees. PayPal admitted no wrongdoing in settling the claims, which were filed in 2002 as part of two federal class-action suits that also alleged other customer service deficiencies.