PAYPAL'S 'ABUSIVE' CONDUCT

[Panich52]

National Law Journal

PAYPAL'S 'ABUSIVE' CONDUCT

When are a company's actions not just unfair and deceptive, but also abusive? A new case against PayPal Inc., which will pay $25 million to settle charges that the company illegally signed up consumers for unwanted credit, sheds light on a murky legal standard created by the Dodd-Frank Act.

The Consumer Financial Protection Bureau, which brought the PayPal case in Maryland federal district court, has declined to define abusive conduct — a standard that's apart from long- established consumer protection terms "unfair" and "deceptive" — through any regulation. Instead, the CFPB is laying out what it means one enforcement action at a time. For lawyers and their clients, and even members of Congress, understanding the parameters of abusive practices has been unsettling. The abusive aspect of the PayPal case "related to how [PayPal] dealt with consumers in applying payments," CFPB deputy enforcement director Jeffrey Ehrlich told reporters on a conference call. The agency "found under the facts that the company had taken unreasonable advantage of consumers' inability to protect themselves." — Jenna Greene

http://www.nationallawjournal.com/home/id=1202727294523?kw=INADMISSIBLE%3A%20Ex-Speaker%20Gingrich%20Signs%20With%20Dentons&et=editorial&bu=National%20Law%20Journal&cn=20150527&src=EMC-Email&pt=Daily%20Headlines&slreturn=20150427110317

[jberryhill]

1. Link goes to wrong article and requires subscription

I think you meant this one:

http://www.nationallawjournal.com/id=1202726875917/Why-the-CFPB-Found-PayPals-Conduct-Abusive

[marym625]

2. The National Law Journal requires a subscription

But you don't have to pay anything or provide any payment information

Just an FYI.

[Panich52]

7. Thx. Link was to page w/ several articles. I should have separated

[MADem]

3. YOUR LINK is bad but THIS ONE might do it....

http://www.nationallawjournal.com/courts-litigation/id=1202726875917/Why-the-CFPB-Found-PayPals-Conduct-Abusive?mcode=1202615549854&curindex=22

Why the CFPB Found PayPal's Conduct 'Abusive'
PayPal to pay $25M to settle allegations the company illegally signed up consumers for unwanted credit.
Jenna Greene, The National Law Journal

Read more: http://www.nationallawjournal.com/id=1202726875917/Why-the-CFPB-Found-PayPals-Conduct-Abusive#ixzz3bLylTgNj

...In its complaint, the agency listed six charges against PayPal, including one that details the conduct the CFPB said was “abusive.” The agency has declined to define abusive conduct—a standard that’s apart from long-established consumer protection terms “unfair” and “deceptive”—through any regulation.
Instead, the CFPB is laying out what it means one enforcement action at a time. For lawyers and their clients, and even members of Congress, understanding the parameters of abusive practices has been unsettling.
"How can companies comply with this law?" Rep. Sean Duffy, R-Wisconsin, asked Cordray at a 2012 oversight hearing, calling it "a subjective standard with no bright line.”
The CFPB brought its first action alleging abusive conduct against American Debt Settlement Solutions Inc. in 2013. Since then, the agency has filed another half-dozen cases. The PayPal settlement contains the largest civil penalty in an abusive case: a $10 million fine, on top of $15 million in consumer refunds.
The abusive aspect of the PayPal case “related to how [PayPal] dealt with consumers in applying payments,” CFPB Deputy Enforcement Director Jeffrey Ehrlich said on the conference call with reporters Tuesday. The agency “found under the facts that the company had taken unreasonable advantage of consumers’ inability to protect themselves.”
PayPal Credit customers, according to the agency’s complaint, “could not clearly understand how payments were applied to deferred-interest promotions.” PayPal and merchants sometimes offered customers no interest for six or 12 months on specific purchases.

[localroger]

4. Not that hard

"How can companies comply with this law?" Rep. Sean Duffy, R-Wisconsin, asked Cordray at a 2012 oversight hearing, calling it "a subjective standard with no bright line.”

Here's a clue Representative: Don't act like a greedy dick and set yourself up to profit if your customer doesn't understand the terms and conditions. Not really that hard if you think about it.

[MADem]

5. I won't touch paypal with a ten foot pole.

The amount of "fake spam" danger - warnings I get from phishers about "my" paypal account is staggering.

I've never had a paypal account, and never will. I don't think their business model is too cool, frankly.

[BrotherIvan]

6. Paypal bleeds customers because their business practices are bankrobbery

How they are still in business with such a high value is beyond me. $25m is a drop in the bucket compared to what they make. Think they'll stop? Nah, me neither.