Attorney General Formella Announces $1.75 Million and Injunctive Relief Settlement with PayPal, Inc. and PayPal Holdings, Inc. Concerning Unfair and Deceptive Practices

Concord, NH - Attorney General John M. Formella today announces that his office has negotiated a settlement with PayPal, Inc. and PayPal Holdings, Inc. (collectively PayPal) that includes injunctive relief requiring PayPal to make significant changes to its popular e-payment platforms, PayPal and Venmo, both of which are owned by PayPal, Inc., as well as a monetary payment of $1.75 million.

"Today's settlement with PayPal sends a strong message that companies who encourage consumers to trust them with their financial resources must be transparent regarding the ability of its customers to freely access their funds," said Attorney General Formella. "I am proud that this agreement includes meaningful measures to ensure that consumers who depend on these e-payment platforms receive clear, accurate information and that their privacy is protected."

New Hampshire consumers regularly rely on prominent e-payment platforms PayPal and Venmo to pay for essentials like rent, groceries, and childcare, and receive paychecks and government assistance funds. These platforms are particularly critical to low-income residents who lack access to traditional banking.

A New Hampshire Department of Justice investigation raised serious concerns that PayPal had violated New Hampshire's consumer protection laws by, among other things:

• deceptively advertising that customers would be able to access their funds anytime when in fact, many consumers reported difficulty in doing so when PayPal wrongfully froze their accounts;
• advertising "Purchase Protection" for goods-and-services transactions, but imposing significant hurdles that prevented many consumers from receiving the "protection" they were promised; and
• implementing inadequate disclosures regarding the privacy of Venmo users' sensitive financial information.

Under the terms of an assurance of discontinuance filed with the Merrimack County Superior Court, PayPal will make key changes to its marketing and app interfaces on PayPal and Venmo, including:

• Revising Venmo's "Purchase Protection" interfaces to remove misleading language and the "shield" icon, accurately define the term "purchase," and provide direct links to eligibility limitations;
• Enabling consumers to choose privacy as a default setting during Venmo sign-up, through an improved onboarding flow and notifications to existing Venmo users about how to adjust their privacy settings;
• Incorporating risk-based scam and fraud warnings on PayPal and Venmo to alert consumers to potential scams and plainly disclose that users may not get their money back if they are scammed; and
• Providing consumers with clear information about their ability to access funds and steps to lift restrictions when PayPal freezes their PayPal or Venmo accounts.

The New Hampshire Department of Justice Consumer Protection and Antitrust Bureau investigates unfair, deceptive, or unreasonable practices involving New Hampshire consumers. To file a complaint with the New Hampshire Department of Justice, call the Consumer Protection Hotline at 1-888-468-4454 or file a complaint online at https://www.doj.nh.gov/consumer/complaints.