PayPal Owes You Money: Things You Need To Know About It

PayPal Owes You Money: Things You Need To Know About It
MWC Barcelona 2013 – eBay, Paypal Kārlis Dambrāns/Flickr CC Y 2.0

Consumer Financial Protection Bureau (CFPB) earlier Tuesday filed a complaint against PayPal for being deceptive about their payment structures and promotional projects.


According to a report from, PayPal illegally signed up their clients to their credit product, PayPal Credit, also known as Bill Me Later in its earlier days.

What they found sketchy is that, according to the CFPB, PayPal failed to deliver its promises and “mishandled” payment disputes when the bills to the customers came.

$15 Million-Worth Of Redress, $10 Million-Worth Of Penalty

Under the federal court complaint filed by CFPB, PayPal has to pay $15 million-worth of redress and $10-million worth of damages to their customers. That includes you, who unknowingly, were enrolled in their PayPal Credit program.

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PayPal Credit Program

PayPal Credit Program is a payment financing scheme offered by the company wherein PayPal users can sign up. Once approved, they can buy anything they want with deferred payment options available for 6, 12 or 18 months, depending on the options presented.

Comenity Capital Bank pays the merchant and the clients get their products.

According to PayPal’s website, there is no interest incurred if the products are paid in full within 6. 12 or 18 months. The Annual Percentage Rate is 19.99% and the Minimum Interest Charge is $2.00. The credit starts at $250.

They give lesser penalties if the clients miss a payment for the first time. It could be $35 or less.


CFPB Director Richard Cordray said in an interview that PayPal signed up customers to their online credit product (PayPal Credit), which is illegal. Since it rolled out in 2008, customers were complaining that PayPal enrolls them in PayPal Credit even when they were opening a regular account. They were paying bills without knowing they were doing this on credit.

One consumer complained on the website the he was paying his bills via PayPal and saw that the main option presented was PayPal Credit instead of his regular options. He used it, thinking it was normal, only to end up with his credit score lowered and PayPal allegedly presenting no interest in fixing it for him.

Here are the points raised by CFPB to the federal court:

– Advertising deceptions: PayPal didn’t honor the credits promised to clients upon purchasing.

– Abuse in interests: PayPal gave clients limited time in paying, and when customers reached out to their hotlines for questions, they were given inaccurate information, leading to more interests and more delays.

– Enrolling consumers in PayPal Credit without them knowing: PayPal gave deceiving options to clients in such a way that most of them got enrolled in the program unknowingly.

– Option to pay via PayPal Credit was given as a default or main way of paying, even if customers don’t want to: PayPal has saved the PayPal Credit as the default option for customers.

– Illegal billing practices: Some payments were not credited or were credited late.

– Mishandled consumer disputes: The billing errors were not addressed well.

  • Sam_Manilla

    Paypal = Ripoff.. they still owe me money from 2011.