In a newly filed action, the Consumer Financial Protection Bureau (CFPB) has once again made clear that it will invoke its authority on any type of business involving consumers and their money.  If a consumer practice borders on deceptive or unfair in nature, businesses can expect to be held accountable.

In filing a lawsuit against PayPal (where PayPal has already consented to a proposed order), the Company has agreed to pay $15 million in consumer redress, and an additional $10 million penalty, and will be expected to “improve its disclosures and procedures.” PayPal is alleged to have illegally signed customers up for its PayPal Credit program (formerly known as Bill Me Later) and engaged in other deceptive practices.  

The CFPB alleged that “many consumers who were attempting to enroll in a regular PayPal account, or make an online purchase, were signed up for the credit product without realizing it.” Further, PayPal allegedly did not honor advertised promotions for credit toward purchases, “[a]busively charged consumers deferred interest,” and “[m]ade consumers use PayPal Credit for purchases instead of their preferred payment method.” For more information, read the CFPB’s full release

Businesses are encouraged to proactively evaluate their marketing and operational procedures on a regular basis, with particular focus as to their own representations to attract customers and the fees and charges then assessed, so as to avoid being forced into a regulatory enforcement action.