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The U.S. Consumer Financial Protection Bureau is asking a federal court to penalize PayPal for "illegally signing up and billing tens of thousands of consumers for its online credit product, PayPal Credit." Under the proposed order, PayPal would return $15 million to customers, pay a fine of $10 million for its actions, and make its PayPal Credit practices more clear:
Since 2008, the company has offered PayPal Credit, formerly called Bill Me Later, which is a financial product that operates like other forms of credit. Consumers make purchases using it as a form of payment and then repay the debt over time. As with credit cards and similar products, consumers using PayPal Credit may incur interest, late fees, and other charges.
From the first encounter a consumer may have had with PayPal Credit, there were problems. Tens of thousands of consumers who were attempting to enroll in a regular PayPal account, or make an online purchase, were signed up for the credit product without realizing it. The company enrolled other consumers while they tried to cancel or close out of the application process. Many people ended up enrolled without knowing how or why, only to discover unexpectedly that they actually had an account when they learned of a credit-report inquiry, or when they received emails welcoming them to PayPal Credit, billing statements, or debt-collection calls.
One reason so many consumers ended up having this product, unbeknownst to them, was that PayPal set the default payment method for all purchases to PayPal Credit. Other consumers were simply not able to select another payment method when they tried to pay.
Then, for those who did willingly sign up for the product, PayPal in many instances failed to honor advertised promotions, such as the promise of a $5 or $10 credit toward consumer purchases. This was deceptive advertising.
Finally, once enrolled, consumers encountered headache after headache. PayPal failed to post payments properly, lost payment checks, and mishandled billing disputes that consumers had with merchants or the company itself. Numerous consumers reported that the company took more than a week to process payment checks. And even when customers were unable to pay because of website failures, they still got charged late fees.
Also at The Register.
(Score: 3, Informative) by frojack on Thursday May 21 2015, @06:05PM
Yup, I agree, its damned convenient. And not hard to avoid any excessive charges.
I heard all the rage stories, and before I signed up, I called them and asked them about account freeze horror stories.
They explained that if you receive paypal funds routinely, (like I do for my day job) they expect to know how much and how often. If you start getting a big influx of deposits, you just have to call them up and let them know that business is booming, and you expect your inbound will go up. They just want to know you aren't a drug dealer or funding jihad or something illegal.
Many of our paypal customers are over seas. (which actually makes you LESS suspicious, by the way). So when we introduced a new catalog item, which we knew our existing customers had been asking for, we called Paypal, explained that we expected a rash of high dollar orders from over seas (as well as a list of countries most likely to order) and they raised our inbound amount flag, and we never had a problem.
We've since told our Bank's credit card clearing service to take a hike, and we clear all credit card orders through PayPal too. They've had that service for a long time, they actually act as a on-line CC clearing agency for big banks, like Wells Fargo.
The deeper you dig into the rage over paypal the more likely you are to find somebody selling/buying contraband, or stolen goods/services OR someone too lazy to just pick up the phone.
If you start a Go Fund Me type of operation, you better let them know. Lots of little amounts suddenly showing up from all over trips their alarms big time.
No, you are mistaken. I've always had this sig.
(Score: 1) by nitehawk214 on Thursday May 21 2015, @06:25PM
The only thing that concerned me is that anyone that knows your checking account number can completely clean the account out whenever they want. Since checking accounts are literally free with my bank, I simply have them set up an empty separate account that I write paper checks and use for PayPal. When I need to transfer money, I just do it with the bank's website to keep the account for PayPal only containing as much money as is necessary.
I highly suggest doing this for anyone that ever writes a paper check, even if you trust PayPal completely. Sure, the bank will give you your money back if there is actual fraud, but it is a lot easier to keep your money safe in the first place.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh