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".