WASHINGTON (5/20/15)--A complaint filed by the Consumer Financial Protection Bureau (CFPB) Tuesday alleges PayPal, Inc. illegally signed up consumers for an online credit product. Under a proposed consent order, PayPal would pay $15 million in consumer redress and a $10 million penalty and required to improve disclosures and procedures.
The CFPB alleges that PayPal deceptively advertised promotional benefits that it failed to honor, signed consumers up for credit without their permission, made them use PayPal Credit (formerly known as Bill Me Later) instead of their preferred payment method and mishandled billing disputes.
PayPal Credit is a line of credit offered by PayPal that consumers can use to pay for online and other purchases. PayPal Credit users may incur interest, late fees and other charges.
The CFPB’s specifically alleges PayPal:
According to the bureau, the consent order was filed with the U.S. District Court for the District of Maryland.