PayPal is in some hot water this week! The online payment system has a “Bill Me Later” option which allows users to be credited and pay the money back later. However, there must’ve been a glitch that had users sign up for this option without their consent. Users were forced to use PayPal Credit instead of other payment methods, and “mishandled” billing in a way that ra up late fees and extra interest charges.
According to the Consumer Financial Protection Bureau (CFPB),
“Many of these consumers learned of their PayPal Credit accounts for the first time when they received billing statements with accrued late fees and interest charges, or when they received debt-collection calls”
The CFPB wants PayPal to pay $15 million in reimbursements to consumers who were enrolled in the program or made purchases through it. Also a $10 million fine to the CFPB’s Civil Penalty Fund, covering all penalties. According to Bloomberg.com, a PayPal spokesperson, Amanda Miller spoke on the issues and said:
“The company takes consumer protection very seriously. We continually improve our products and enhance our communications to ensure a superior customer experience,” Miller said in an e-mail. “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.”
Altogether this mistake will be costing the company $25 million dollars.