PayPal fined $25 million for deceptive 'Bill Me Later' credit program

By Scorpus · 15 replies
May 20, 2015
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  1. paypal bill fine credit cfpb bill me later

    PayPal has been fined by the Consumer Financial Protection Bureau (CFPB) for a range of issues relating to the company's deceptive 'Bill Me Later' credit program, which allows users to pay back the cost of an online purchase at a later date.

    According to the CFPB, PayPal signed up people to their credit service without their permission, forced users to use the program instead of other payment options, deceptively advertised the benefits of the program, and mishandled billing so that the company accrued interest and late payment fees.

    The CFPB stated that many people who inadvertently signed up for PayPal Credit only discovered their accounts after they had received billing statements that contained late payment fees. Although PayPal hasn't admitted any fault in the way they handled their credit program, they have accepted a decent fine from the CFPB.

    Specifically, PayPal will be required to pay a total of $15 million in reimbursements to customers who accidentally made purchases through a PayPal Credit account. Customers who also received fines or were made to pay fees will also be eligible for a reimbursement. On top of that, PayPal will have to pay a $10 million fine to the CFPB Civil Penalty Fund.

    PayPal will also be required to adequately disclose when people are signing up for a PayPal Credit account, or when they will be charged fees or interest. In a statement, PayPal said that "we continually improve our products and enhance our communications to ensure a superior customer experience".

    Permalink to story.

  2. Ranger1st

    Ranger1st TS Evangelist Posts: 348   +124

    Pay Pal has been crooked since day one, my only surprise is that nothing has happened sooner then this.
  3. fimbles

    fimbles TS Evangelist Posts: 1,185   +208

    Paypal are horrible and I wish there was a better alternative. Recently I had to wait for 21 days for paypal to clear a payment because I had dared to use the local royal mail post office instead of ebays printed postage labels. (no ink).

    Wheres my interest?
  4. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 9,726   +3,700

    I've used Paypal many times and have always received email notification with in moments of payment. But then everything I buy usually has a 3 day shipping policy. That might put a bit of priority on payment. I'm having a hard time believing Paypal is the blame for slow payments.
  5. fimbles

    fimbles TS Evangelist Posts: 1,185   +208

    Its when your selling items, not buying.

    Search for paypal pending payments, there are quite a few horror stories.
  6. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 9,726   +3,700

    Ahh, I've never sold anything. I wasn't thinking there would be a difference in the opposite direction.
  7. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,890   +1,224

    I used to run an NFL pick-em league and I let people pay me the dues using Paypal. Paypal would sometimes take $.50 (a 2% fee) off the $25 payment. Other times they wouldn't. I never did figure out why they did it to only some payments, but it added up.

    Paypal better be careful. Bitcoin isn't here yet, but it's out there lurking. Paypal may have some real competition someday.
  8. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 9,726   +3,700

    Inconsistency, that's not good from a business standpoint at all. I'd be questioning them as to why the difference. Because as you say it does add up, even though the amount may be insignificant at that moment.
  9. cmbjive

    cmbjive TS Booster Posts: 777   +138

    I have sold some items and never had an issue with payments. A couple did show up a few days after the sale completed, but it was nothing that I was too worried about.
  10. Kevin82485

    Kevin82485 TS Booster Posts: 168   +45

    I was one of these people who was automatically signed up for the Bill Me Later PayPal Credit Card. I never asked for it and do not want it. And what irritates me is that it is the default payment method instead of my bank account. I cannot figure out how to change it. I have to be careful to check what the payment method is. Recently, I accidentally paid for something with Bill Me Later. Luckily I caught it after the payment went through and paid off the Bill Me Later card, otherwise it could have gone unnoticed for a long time, and I could have accrued late fees and interest.
    cliffordcooley likes this.
  11. Kevin82485

    Kevin82485 TS Booster Posts: 168   +45

    It depends on how the person sends the payment to you. My girlfriend sends me payment for her half of rent and bills each month through PayPal, which is hundreds of dollars worth. PayPal never once has taken a cut of it because she sends it to me as a "gift payment". If she sends it as a regular payment, then PayPal will take a cut.
  12. In order to change the default payment method, after logging in, click the Settings icon (next to the Logout button, top right corner). Then click the Edit link under Payment Settings, next to the Payment preferences label. Then under Paying in Stores you'll see the list of your payment methods, just click the one you want to use as default (you'll see a checkmark appearing next to it)
  13. U and I

    U and I TS Rookie

    As far as I knew and as far as I've experienced, I've been with bill me later since 2009 and I did not experience fees coz I paid my credit before 6 months which means they did not earn from me. It was like I was paying the items (mostly computers) that I bought in cash with no interest.

    The bad thing that I experienced was the PayPal Smart Connect as it has an interest of 26.99 the last time I used it. It was draining me. It was a burden to pay. I was paying and paying but it seemed I wasn't paying it coz of the high interest.

    Good thing, I closed it and then balance transfer my existing credits to another companies. Now, I don't have PayPal Smart Connect anymore and I will not be using it ever again. With Bill Me Later, it is good but pay it before 6 months period coz you are like paying the item in cash. I usually pay before the due date and so my account was fine with Bill Me Later but the last time I used it, it was like 2010 when I bought an 18" HP Laptop - 1TB as a gift for someone special. After that, I didn't use Bill Me Later.
  14. Emexrulsier

    Emexrulsier TS Evangelist Posts: 574   +72

    Not sure if this is still available in the UK, I have a feeling not as I haven't seen it as an option recently. Used to be good when ordering from Dominios Pizza even if you were skint you could buy pizza and pay in 14 days. I didn't like it for Ebay cause I would always bloody forget that I had a payment coming out.

    I also found a way to exploit the system and used as an interest free "pay day loan".

    1 - list something ludicrous on ebay and get your friend to bid on it and when they pay choose the "Pay after delivery option" which is 14 days.
    2 - The seller withdraws the money, spends it as they see fit.
    3 - 14 days time the buyer is debited the money but by then the buyer has been paid so they can no pay back the "buyer"
  15. peterpan56

    peterpan56 TS Rookie

  16. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 9,726   +3,700

    You think the government that doesn't handle our money fairly will step in and make someone else handle our money fairly?

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