Consumers using PayPal to shop online were unknowingly signed up for credit lines and promised discounts and payment options they never received, according to a complaint filed in federal court by the Consumer Financial Protection Bureau (CFPB), The Washington Post reported on Tuesday. The agency wants PayPal pay $25 million for the actions, including $15 million in refunds for consumers and a $10 million penalty. Some people attempting to sign up for regular PayPal accounts didn’t realize they were signed up for credit with the company, a service formerly known as “Bill me later,” until they noticed the inquiries on their credit reports or received emails welcoming them to their credit accounts, according to the agency. Once they were enrolled for the service, which allowed customers to make purchases and pay their bills later, consumers were often defaulted into using PayPal credit as their primary payment method when they shopped with PayPal. That caused them to use credit during times they intended to pay with a checking account or credit card linked to their accounts. Some people said their purchases were charged to PayPal Credit even when they chose another payment method. Many consumers then faced late payment fees and interest charges because they didn’t know their purchases had been charged to the credit line, according to the CFPB.
