PayPal Has to Pay $25 Million for Being Sketchy as Hell

Illustration for article titled PayPal Has to Pay $25 Million for Being Sketchy as Hell

After the Consumer Financial Protection Bureau filed a complaint against PayPal today, the company quickly agreed to refund $15 million to customers it ripped off over the past few years.


PayPal will also pay an extra $10 million in fines to the CFPB, so the total settlement is $25 million. The CFPB accused PayPal of all sorts of schemes, so many that it kinda sounds like PayPal is run by my Grandpa Hirtz in his 1980s casino-boat drinking days rather than business professionals.

The almost impressively illegal scams that PayPal’s now paying for include:

  • Advertising deferred-interest promotions, but then flat-out giving customers the wrong information when they asked about them, or just never answering the customer service line
  • Charging customers with the interest they were unable to defer due to receiving the wrong information and/or never being able to speak to a representative about the deferred-interest promotion
  • Automatically signing people up for credit accounts without asking permission
  • Setting these credit accounts as the default for purchasing, which led to people getting hit with late fees and interest fees on accounts they didn’t know existed
  • Lying about $5 and $10 credit promotions and then never fulfilling them (total Grandpa move)
  • Not bothering to remove late fees even after people paid them
  • Taking weeks to process payments
  • Not bothering resolving customer disputes

It’s telling that the company ponied up the money within a day of the complaint.

[Bloomberg via CFPB]

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Paypal is terrible. I once had to fight with them for two months to get my money back after I sent a product back to the person I bought it from (item was returned new as it was missing an advertised feature), because the seller asked me to send it to address “A” but their registered Paypal address was “B”. Seller basically told me that I was screwed as it was Paypal’s policy to only force refunds when buyers ship back to the registered address.

Then there was the time that I got inadvertently signed up for Paypal credit during checkout at Cabelas online shop. That took about two weeks and multiple phone calls to sort out.

I was at the grocery store a year or so ago and the cashier cheerily told me “we accept Paypal now!”... my terse reply was “why are you acting like that’s a good thing”?

The only thing Paypal is useful for is accepting eBay payments, and that is only because Paypal is owned by eBay and eBay won’t allow competitor payment systems... they’ve effectively turned eBay into a Paypal monopoly.