After US financial authorities filed a complaint against PayPal yesterday, the company quickly agreed to refund $15 million (£9.6m) to customers it ripped off over the past few years.
PayPal will also pay an extra $10 million (£6.4m) in fines to the Consumer Financial Protection Bureau (CFPB), so the total settlement is $25 million (£16m). 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 credit promotions and then never fulfilling them
- Not bothering to remove late fees even after people paid them
- Taking weeks to process payments
- Not bothering to resolve customer disputes
It’s telling that the company stumped up the money within a day of the complaint.