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PayPal ordered to give customers $15M in redressal; $10M in penalty

Oh PayPal. Online payments company PayPal has been ordered by the Consumer Financial Protection Bureau (CFPB) to pay $15 million in consumer redress and a penalty of $10 million (to the Civil Penalty Fund) in the US, reports Gizmodo. This comes as PayPal allegedly illegally signed up tens of thousands of consumers for an online credit program called PayPal Credit (previously called Bill Me Later) without their permission and billed those accounts on credit instead of their preferred payment method. It also allegedly mishandled billing disputes, failed to post payments and lost payment cheques for purchases made between 2008 and 2013. Shopping credits not given PayPal has also been ordered to improve its disclosures and procedures. The CFPB alleged that PayPal deceptively advertised promotional benefits (like credit of $5 or $10 for purchases made on the site) of using the service but did not honor those commitments. It also charged consumers deferred interest even when consumers tried to contact PayPal. Some of these were unable get through to customer service or were given inaccurate info. No way to sign out of program The company enrolled even those consumers who tried cancelling or closing the application process, ending up with PayPal Credit accounts they did not want or were unaware of. These accounts, the CFPB states, were discovered only after PayPal sent welcome mails, billing statements or made debt-collection calls for dues, late fees and interest or if the consumer had filed a credit report inquiry. Consumers incurred late fees and…

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I'm a MediaNama alumna from 2015-16 (remember TinyOwl?) now back to cover e-services like food and grocery delivery, app based transport and policies, platforms and media in India.

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