Uncle Sam spanks PayPal for credit scheme cockup PayPal is going to surrender $25m to settle charges it enrolled consumers into its credit platform without their knowledge or consent. The US government's Consumer Financial Protection Bureau (CFPB) alleges the online payment house used its "Bill Me Later" feature to lure consumers into its credit operation illegally. The …
...they had advertised it as pay 14 days after receipt of purchase. Instead they went ahead and hit the account linked to my PayPal account the same day the merchandise arrived.
But they didn't add on any fees or interest.
I decided not to spend several days trying to get through to an actual human being at PayPal by phone to discuss the matter.
I used BillMeLater/PayPalCredit from 2006 up to 3 months ago. Everything went sideways with PayPal running it from the start, but over the last 9 months it has become so corrupt, that this 25 million fine is a laughing joke. About 9 months ago, PayPal took down access to an itemized list of purchases that let you know when each purchase was about to start charging interest. I got hit with this a few times and according to PayPal credit I had to call them each time to find out this information. Fine, whatever, I just ignored that teething grinning.
About 5 months ago, my account started to accrue interest on items that were no where near "past due". Turns out I had a canceled item, and that item had interest figured (pre-interest??). So when I canceled the item, the interest was left hanging. They didn't start to charge my account until the 6 Months No Payments period had expired. Yes, they charged me interest on a canceled item and waited 6 months to let me know so they could suck me dry.
All the nightmares about PayPal are true. You might be lucky and haven't run into them, but eventually you will fall asleep, and then Freddy PayPal will come!
I wondered what this was a few weeks ago when I paid for something using PayPal (UK) and they practically shoved the pay later scheme down my throat. I declined but it asked me again during the same transaction and even tried to automatically opt me back in by handily forgetting I'd said no and defaulted to using pay later as the payment option on the very last confirmation screen which I nearly didn't notice. It was extremely underhanded and nowhere did it clearly state fees or what exactly it was.
If it defaults to opting in I'd let it happen and then drag them in front of the SFO. This is illegal in *many* countries exactly because it is underhanded and prevents a fair evaluation of terms before engaging in a contract (so it would probably also get hit with "unfair contract" charges).
In addition, because it's a loan it attracts all sorts of extra obligatory checks (courtesy of banks and other organisations who were being a bit too "creative" with loans) which you cannot just satisfy with "we warned the customer on screen with light grey 6 point text on white 3 pages down" and a default "on" tickbox.
On the plus side, if you would buy anything using Paypal with this enabled, it attracts the same type of statue as a credit card payment on goods: you get 30 days to roll back the transaction, no questions warranted and no admin fee permitted. I forgot which law it is, but it relates to buying goods on credit - I think it applies to any purchase on credit over £100 or so.
And what's the "normal" interest rate?!! Something like 30%? It's like taking out an (american) Indian
"Pay-Day" loan...
I've been (retired) an U.S. ePAY member from the early '90's, and a "PREY-pay" user from the '00's... When they (P.P./Musk) pushed their "bill-me-later" on every bid/purchase, I "disengaged" from them.
If I can't pay with a bank C.C.(visa, master card), directly on site, I'll find another vendor. Goggle Prey is another I won't deal with..
I believe E-Bay is pulling the strings on this. Musk, as I understand it, hasn't been involved since E-Bay bought it. With their revenue dipping, E-Bay is grabbing at all the straws they can. This is just going to kill E-Bay's reputation even faster once someone in the media makes the connection.
I hate it even more that when used just as a CC processor they still depending on country REQUIRE you to create a paycrud account - I try to get through a few times and sometimes I will hit the just pay page without the whole you must create an account... but if I can't I'll let the seller know I can't give them money due to that.
I have not used Paypal for over ten years. My account got hacked, I got spammed, I closed the account after a devil's worth of hassle (ended up cancelling the credit card it was linked to, for good measure), and refuse to use it. It seems to be an additional layer of fees for not very much useful.
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