PayPal fined $25m over consumer credit allegations

PayPal has paid $25 million (€22.4 million) to settle a series of complaints by the US consumer financial watchdog that it illegally steered consumers into its online credit product, PayPal Credit.

According to the Consumer Financial Protection Bureau, PayPal lured consumers with promotional rates it failed to honour, signed people up for credit without their permission, made them use PayPal Credit instead of their preferred payment method, and then mishandled billing disputes when they arose.

The money-transfer company, based in San Jose, California, did not admit wrongdoing but agreed to pay $15 million in redress to consumers, along with a $10million penalty.

The CFPB move against PayPal began in 2013.

– Copyright Financial Times Ltd 2015