Monday, February 27

Hall of Shame: CFPB Takes Action Against PayPal for Illegally Signing Up Consumers for Unwanted Online Credit

The job of the most honest seller is to sell you, not to give you reasons to buy from a competitor. That over-riding reality drives the free-enterprise system, and places a responsibility on you.

FoolProof's Hall of Shame is here to remind you why a healthy dose of skepticism should rule your decisions before dealing with anyone who wants to touch your money or your general welfare.

May 19, 2015

Privacy

"PayPal illegally signed up consumers for its online credit product without their permission and failed to address disputes when they complained," said CFPB Director Richard Cordray. "Online shopping has become a way of life for many Americans and it's important that they are treated fairly. The CFPB's action should send a signal that consumers are protected whether they are opening their wallets or clicking online to make a purchase."

Note: The proposed consent order is not a finding or ruling that the company has actually violated the law. It has been filed with the U.S. District Court for the District of Maryland, and would have the force of law only if it is approved by the presiding judge.

Source: www.consumerfinance.gov

The CFPB alleges that PayPal:

  • Deceptively advertised promotional benefits
  • Abusively charged consumers deferred interest
  • Enrolled consumers in PayPal Credit without their knowledge or consent
  • Made consumers use PayPal Credit for purchases instead of their preferred payment method
  • Engaged in illegal billing practices
  • Mishandled consumer disputes about payments

PayPal would:

  • Pay $15 million in redress to victims
  • Improve disclosures
  • Pay $10 million civil penalty

Note: The proposed consent order is not a finding or ruling that the company has actually violated the law. It has been filed with the U.S. District Court for the District of Maryland, and would have the force of law only if it is approved by the presiding judge.