PayPal has been fined a whopping $25 million dollars for lying to consumers about PayPal credit services. The fine is broken down with $15 million being paid out to consumers who were defrauded and $10 million to the Federal Government, which is to cover fees for the investigation. The violation PayPal made was signing up customers for their credit program rather than the consumer’s preferred payment method. In essence PayPal credit was forced onto those consumers when they clearly did not want it.
“PayPal illegally signed up consumers for its online credit product without their permission and failed to address disputes when they complained,” said CFPB Director Richard Cordray in a statement from the Bureau. “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.”
PayPal was founded in 1998 as the company Confinity which developed security software for handheld devices. Later in 2000 Confinity merged with X.com which was owned by Elon Musk now of Tesla fame and PayPal was born. This is clearly a grievous action on the part of PayPal in abusing the trust of it’s customers and forcing a service on them they did not want. PayPal did find time to make a comment on the matter.
“PayPal Credit takes consumer protection very seriously,” the person said. “We continually improve our products and enhance our communications to ensure a superior customer experience. 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.”
What do you think of what PayPal did? Is the fine sufficient or should they be held to a higher fine? Let us know your thoughts in the comments below or on Google+, Facebook and Twitter.Source: Digital Trends
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