Last month, reported on a class action alleging that Bill Me Later the popular payment option found on eBay and other high-volume retail websites charges interest rates and late fees far in excess of California law.

According to the suit, Bill Me Later skirts usury laws which cap interest rates for non-bank entities at ten percent by recruiting CIT Bank as its official provider of all banking services. The plaintiffs contend that Bill Me Later in effect 'rents' CIT Bank's name and its bank charter as a scam, for the sole purpose of jacking up interest rates as high as possible.

Now eBay, which bought Bill Me Later for $945 million in 2008, has addressed the suit in its latest annual shareholder report, the required report of a public company's overall performance and prospects for the future a sort of written State of the Company address.

In the report, filed earlier this week, eBay reveals that a successful resolution of the suit could lead to changes in how the company operates, and would also threaten to increase costs or reduce revenues.

We intend to vigorously defend against these lawsuits, the filing reads. However, this and other regulatory and licensure claims could result in costly litigation and, if successful, could require us to change the way we or our users do business in ways that increase costs or reduce revenues (for example, by forcing us to prohibit listings of certain items for some locations). We could also be subject to fines or other penalties, and any of these outcomes could harm our business.

It's doubtful that eBay would scrap Bill Me Later entirely, given that it shelled out close to a billion dollars for the entity less than two years ago. The company's assertion that it could prohibit listings of certain items for some locations suggests that it might limit use of Bill Me Later to items that yield a large enough return to make it worth its while.

Given that most certified class actions end with a settlement in California, less than one percent go to trial the current suit is likely to produce a settlement of some sort, assuming that the class is certified.

Then again, it's hard to read too much into any financial filing, since they are typically painted with broad brushes that seem to take every contingency into consideration. In addition to the obvious benefits inherent in keeping shareholders well-informed, the threat of litigation helps keep companies as honest as possible. Many securities class-actions are spurred by material misrepresentations in financial filings, which means that corporations are often overly pessimistic in assessing the impact of any pending litigation.

The lawsuit, which seeks an injunction prohibiting Bill Me Later from charging more excessive fees, says that lead plaintiff Kyle Sawyer has incurred a 70% annual interest rate and that some consumers report that annual interest rate Bill Me Later charges exceed 100 percent per year.