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May 19, 2015
CFPB orders PayPal to pay $25M
CFPB filed a complaint and proposed consent order against PayPal Inc. Tuesday for allegedly signing up consumers for PayPal Credit illegally and without their permission.
The proposed order would have PayPal pay $15 million to consumers and pay a $10 million penalty.
CFPB Director Richard Cordray said, "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."
CFPB said PayPal deceptively advertised promotional benefits for the service that it then didn't honor and that it made consumers use PayPal Credit (formerly known as Bill Me Later) instead of their preferred payment method. PayPal has offered the service since 2008.
CFPB also alleged that PayPal did not post payments properly or remove late fees and interest charges when their website was to blame for consumers not being able to pay. CFPB ordered that, in addition to the fine and redress amount, PayPal improve its consumer disclosures.
The proposed order would have PayPal pay $15 million to consumers and pay a $10 million penalty.
CFPB Director Richard Cordray said, "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."
CFPB said PayPal deceptively advertised promotional benefits for the service that it then didn't honor and that it made consumers use PayPal Credit (formerly known as Bill Me Later) instead of their preferred payment method. PayPal has offered the service since 2008.
CFPB also alleged that PayPal did not post payments properly or remove late fees and interest charges when their website was to blame for consumers not being able to pay. CFPB ordered that, in addition to the fine and redress amount, PayPal improve its consumer disclosures.
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