Consumer Financial Protection Bureau Hits PayPal With Complaint, Proposed Consent Order
The Consumer Financial Protection Bureau filed a complaint and proposed consent order against PayPal in U.S. District Court in Greenbelt, Maryland, Tuesday, for “illegally signing up tens of thousands of consumers for its online credit product, PayPal Credit,” formerly known…
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as Bill Me Later, CFPB Director Richard Cordray said about the complaint. CFPB alleges PayPal “lured in consumers to this product with deceptive advertising, signed up people without them knowing it, and then mishandled billing disputes when they arose,” Cordray said, which violates the Dodd-Frank Act. “This kind of conduct has no place in the consumer financial marketplace,” he said. Under the proposed consent order, PayPal would pay $15 million in consumer redress, a $10 million penalty and be required to improve disclosures and procedures, a CFPB news release said. Online shopping and the financial products that make it possible are great, but financial services providers need to ensure people are treated fairly and according to the law, Cordray said. "PayPal Credit takes consumer protection very seriously," a PayPal spokeswoman said. "We continually improve our products and enhance our communications to ensure a superior customer experience," she said. "Our focus is on ease of use, clarity and providing high-quality products that are useful to consumers and are in compliance with applicable laws."