Chris Lange, FISM News
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A top federal financial regulator said this week that he was considering investigating PayPal over a rescinded policy to fine users up to $2,500 for spreading “misinformation.”
Consumer Financial Protection Bureau Director Rohit Chopra expressed concern that the policy represented an extreme measure to regulate free speech in a CNBC interview that aired Wednesday.
“I’ve never actually never heard of a payment system thinking that it could fine someone for legal expression that their users are making,” he said.
The international online payment company announced on Monday that a revision to its Acceptable Use Policy (AUP) allowing the company to automatically debit up to $2,500 from user accounts for promoting content it disagrees with was published “in error” after former PayPal president and Lightspark CEO David Marcus excoriated the policy as “insanity” on social media.
Chopra said the agency has “ordered most of the major Big Tech firms and payment companies to provide us with information about how are they making decisions about who they kick off their platforms. But we also need to look into whether they believe they can be fining users for legal activity.”
He added that, while there are no current plans to act, the bureau should investigate the matter, adding that such a probe would represent “new territory” for the agency.
FISM reported this week that California-based PayPal sent an email to users Monday claiming that the policy “went out in error” and apologized for any “confusion” it may have caused. PayPal asserted that information contained in the revision was “incorrect,” without offering an explanation as to why or how it was published by mistake.
PayPal’s revised AUP, which was set to go into effect Nov. 3, would have given the payment services firm unprecedented power to automatically debit fines from the accounts of users who participate in activity arbitrarily deemed by the company to “depict, promote, or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation, etc.),” or which “present a risk to user safety or wellbeing.”
The “error” notice was disseminated a day after former PayPal president Marcus slammed the new AUP as one that “goes against everything I believe in.” Former PayPal executive Sanja Kon concurred with his assessment, saying the policy “crosses all kinds of lines.”
In its rescission, PayPal asserted that the company “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,” it added. The apology included a $15 payment voucher and a plea to users to “stay with our PayPal family,” according to a Reddit report.