PayPal Fined Over $25 Million For Sketchy ‘Bill Me Later’ Program
PayPal is under fire for its “Bill Me Later” program. PayPal is being fined an estimated $25 million for illegally enrolling its customers in the program.
According to MSN, PayPal will have no choice but to pay $25 million in refunds, as well as penalties. It’s believed that the service illegally signed people up for the online credit program.
According to PayPal’s Bill Me Later, the service allows customers to have more time to pay back PayPal for purchases. “Bill Me Later is now PayPal Credit, but your existing account information and credit line will still remain intact.”
PayPal stuck with $25 million in fines for signing users up to its credit program http://t.co/ViFhY3j9sS pic.twitter.com/oR6Vdjnoiq
— The Verge (@verge) May 19, 2015
The site goes on to explain just how Bill Me Later works.
“PayPal Credit is a service that lets you buy now and pay later. Think of it as a secure, instant, and reusable credit line without the plastic. PayPal Credit is available as a payment option at thousands of online stores and once you link it to your PayPal account, it can be used almost everywhere PayPal is accepted.”
According to the U.S. Consumer Financial Protection Bureau director, PayPal was deceptive with their customers. Richard Cordray released a statement to the press, stating that “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.”
He continued, “This kind of conduct has no place in the consumer financial marketplace. 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.”
In order to deceive customers, PayPal put the credit account on default upon setting up an account. Additionally, PayPal didn’t follow through on its $5 and $10 credit that’s purchased through their different running promotions.
“PayPal failed to post payments properly, lost payment checks and mishandled billing disputes that consumers had with merchants or the company itself.”
Although PayPal hasn’t admitted to doing anything wrong, the company decided to agree to pay $15 million for refund money, and the other $10 million goes to the civil penalty to the bureau. In this settlement, PayPal now has to be very clear about the credit system upon enrollment.
@WSJ They did me same way and I’ve contacted them and they never respond!
— Dannak (@kornegay_danna) May 19, 2015
[Photo by Sean Gallup / Getty Images]