PayPal under Fire as Credit Service Promotions Backfire
PayPal under Fire as Credit Service Promotions Backfire
  • By Timothy Daniel (daniel83@koreaittimes.com)
  • 승인 2015.05.22 01:10
  • 댓글 0
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American worldwide online payments system operator PayPal has landed in hot water with the United States’ Consumer Financial Protection Bureau (CFPB) for illegally signing up consumers to its online credit service, PayPal Credit. The operator has agreed to refund US$15 million to customers and to shell out $US10 million in fines.

The CFPB earlier this month filed a complaint and a proposed consent order in a federal court, accusing PayPal of “signing consumers up for credit without their permission, making them use PayPal Credit instead of their preferred payment method and then mishandling billing disputes.”

Users were left fuming, claiming that they had been “deceived” about unfulfilled US$5 and US$10 credit promotions. The CFPB also said that it has unearthed evidence that customer disputes had also been left unresolved, and that many payments had been processed late.

The latest development comes in the midst of what has already been a torrid month for PayPal. Earlier this week, the payments system operator faced rage from web users after it decided to freeze the account of Andrew Sampson, a developer who had been working on a search engine that could find pirated content. PayPal said it was acting in in response to a complaint lodged by the Motion Picture Association of America.

Net users accused the company of “making up laws as it sees fit,” “tyrannical measures” and pointed out that “not even banks can freeze assets without going through legal channels.”

Last week, PayPal’s Russian operations blocked the account of the compilers of a report that claims to offer prove that Russian troops are covertly “invading” Ukraine. A spokesperson told the media, "PayPal Russia does not currently allow any political parties or political causes in Russia to receive donations due to the complexity of complying with local rules.”

One of the publication’s authors, Vsevolod Chagaev, accused PayPal of being “afraid of the impact of the Russian government.”

Former PayPal senior executive Ken Miller dealt his former company another blow this week, when he revealed in an interview that he believes PayPal’s services may have a shelf life, and may soon be eclipsed in the security stakes by Bitcoin ventures. Miller said, “Eventually Bitcoin has the potential to be much more secure than any existing financial services system including PayPal.”

The developments come only a few months after PayPal launched Korean ventures in the form of a Korean-language website. The site went live on February 12 this year, and was followed up by a visit to Korea by Pay Pal co-founder Peter Thiel.

By Timothy Daniel


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