PayPal Stuck With $25 Million In Fines For Signing Users Up To Its Credit Program

Posted: May 21, 2015 in Tech

If you’ve ever used PayPal to buy something, you probably had to go out of your way to avoid hitting the “Bill Me Later” option, a credit service that fronts the money and has users pay it back at a later date. According to the Consumer Financial Protection Bureau (or CFPB), that was the least malicious thing about the program over the past few years. In a complaint filed today, the organization says PayPal signed people up to the service without their permission, deceptively advertised its benefits (which never materialized in some cases), forced users to use PayPal Credit instead of other payment methods, and “mishandled” billing in a way that raked up late fees and extra interest charges. All in all, very bad things for people trying to spend money on the internet.

“Many of these consumers learned of their PayPal Credit accounts for the first time when they received billing statements with accrued late fees and interest charges, or when they received debt-collection calls,” the complaint says.

As a result, the CFPB is requiring PayPal to pay out $15 million in reimbursements to consumers that mistakenly enrolled in the program or made purchases through it, as well as others who garnered fees from questionable customer service. That goes with a $10 million fine to the CFPB’s Civil Penalty Fund, which pays out victims in instances where companies can’t. The CFPB is also requiring PayPal to do a better job at disclosing when people are actually enrolling in the credit program, or being charged fees and interest. PayPal agreed to these measures, but did not admit to any wrongdoings, Bloomberg reports.

Full Story @ [The Verge]


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