What’s going on with PayPal?

The PayPal Controversy

So over the last few days all hell has broken loose over what has been described as an errant release of PayPal’s intention to fine users for behaviour that they consider to be objectionable or discriminatory.

Effective November 3, the new policy would have permitted the payments giant to withdraw $2,500 from your account if they found anything you’ve said to be objectionable, including “misinformation” or “discrimination” of groups or individuals based on gender identity. The new policy will apply to actions taken via PayPal’s platform.

PayPal said:

An AUP* notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused.

(*acceptable use policy)

PayPal fining users for misinformation would be a completely unprecedented move as an action by a major corporation toward its users. Every good business should have an Acceptable Use Policy which they ‘enforce’ through preventing misuse of their respective product. This is usually through freezing or closing accounts, or crediting payments back to where they originally came from but never before has it been suggested that a fine against the user would or could be applied as a method of enforcement.

David Marcus, co-founder and CEO of Lightspark and former VP at PayPal had this to say on the matter on Twitter:

It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in

the cryptocurrency entrepreneur said Saturday.

A private company now gets to decide to take your money if you say something they disagree with. Insanity.

Free speech advocates like Elon Musk, one of the entrepreneurs behind the founding of PayPal, as well as prominent conservative voices such as actor Kevin Sorbo, likewise blasted the plans.

Dan Held, the former head of growth marketing for crypto exchange Kraken and a Bitcoin fan, argued users should delete their account with the payment services provider.

PayPal freezing funds for thought crimes is despicable

he wrote over the weekend in response to the controversy.

PayPal Backlash

Somewhat predictably in the face of such high profile criticism which, as is commonplace in modern society, spread like wildfire across multiple platforms, PayPal came out and described the change in their Terms and Conditions as ‘an error’.

The payment giant now says it won’t fine customers $2,500 for ‘misinformation’, adding that the ‘notice recently went out in error’ and that it never intended to penalise account holders on these grounds.

Can paypal fine you for misinformation?

No. They can’t. Now. But they have shown that, error or not, Ts and Cs can be changed and whether this should have been released or not, someone wrote it - it surely must have been discussed by someone somewhere within the organisation for it to have been included at all, whether it was meant to be or not. It is hard to believe that it was just a rogue individual acting on their own volition.

If you would have agreed to the update, you would have accepted (knowingly or otherwise) this change to the Ts and Cs, giving PayPal the authority to take $2500 of your money for behaviour that they judged as wrong.

Let me share with you the wording that could have facilitated that:

Now, you may be of the ilk (like me!) of rightly or wrongly ‘trusting’ a company and just accepting updates, but perhaps this warning shot will make you think again, I know it’s certainly made me think twice.

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