PayPal decides fining people $2,500 for 'misinformation' wasn't a great idea

silversurfer · Oct 11, 2022

PayPal has backed away from fining its own customers up to $2,500 for promoting whatever it determines is "misinformation."

The punishment showed up in its updated acceptable use policy, captured by the Internet Archive's Wayback Machine on September 27, which was due to take effect on November 3. But the revision was deleted by the online payments giant around 2100 GMT on October 8. The biz's current AUP was drafted September 20 last year and remains in effect.

PayPal has reportedly repudiated its planned AUP revision and characterized the snafu as an error.

PayPal did not immediately respond to a request to explain why it had second thoughts about the draft policy change. [...]

PayPal's retreat may calm the chattering classes for the time being but its existing policy could be construed to say the same thing. The active PayPal AUP says any violation of the policy amounts to a User Agreement violation that "may subject you to damages, including liquidated damages of $2,500.00 US dollars per violation, which may be debited directly from your PayPal account(s) as outlined in the User Agreement."

And the User Agreement says, "In connection with your use of our websites, your PayPal account, the PayPal services, or in the course of your interactions with PayPal, other PayPal customers, or third parties, you must not," among various disallowed activities, "provide false, inaccurate or misleading information."

It's likely PayPal's legalese was intended to forbid customers from lying to PayPal about their identity. But the way the agreement is worded gives the company the theoretical leeway to seek damages from someone promoting falsehoods on a website implementing PayPal.