Paypal’s service ‘Bill me later’ is costing the company $15 million in customer reimbursements and $10 million in penalty to Consumer Financial Protection Bureau (or CFPB). ‘Bill me later’ is a credit service that offers the users an option to pay back the credit amount at a later date.
The CFPB has filed a complaint against PayPal, which says PayPal signed people up to the service without their permission, deceptively advertised its benefits (which never materialized in some cases), forced users to use PayPal Credit instead of other payment methods, and “mishandled” billing in a way that raked up late fees and extra interest charges.
Many of these consumers learned of their PayPal Credit accounts for the first time when they received billing statements with accrued late fees and interest charges, or when they received debt-collection calls, as per a Verge report.
CFPB is requiring PayPal to pay out $15 million in reimbursements to consumers that mistakenly enrolled in the program or made purchases through it, as well as others who garnered fees from questionable customer service. Along with a $10 million fine to the CFPB’s Civil Penalty Fund, which pays out victims in instances where companies can’t.
PayPal hasn’t agreed to the measures, but disagreed on the wrongdoing allegations.Category Business