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27 Oct, 2022 21:38

PayPal reinstates $2,500 misinformation penalty

The payment processor has restored a controversial fine just two weeks after customer backlash forced its removal
PayPal reinstates $2,500 misinformation penalty

Online payments giant PayPal has quietly readopted a wildly unpopular policy allowing it to fine users $2,500 every time the company believes they violated its terms of service with transgressions as vague as publishing “harmful, obscene, harassing or objectionable” messages. 

While PayPal had removed the offending policy from its terms of service earlier this month after widespread outcry and calls to boycott it, users noticed a variation of the text had returned on Wednesday and took to social media to call the company out.

Under the revised terms of service, merchants who “receive funds for transactions that violate the Acceptable Use Policy” are warned they will be on the hook for $2,500 for every violation of that policy, with the funds being deducted from their accounts at PayPal’s sole discretion.

The Acceptable Use Policy appears to have been altered to remove “promoting misinformation” as a fine-worthy offense, though the list of prohibited activities still includes some subjective descriptors. “The promotion of hate, violence, racial or other forms of intolerance that is discriminatory,” “items that are considered obscene,” and “certain sexually oriented materials and services” are all forbidden, though infamously difficult to define.

PayPal’s list of “restricted activities,” however, still includes “provid[ing] false, inaccurate or misleading information.” Users who engage in restricted activities can not only face $2,500 charges for every morsel of misinformation but risk losing access to their PayPal account entirely. 

Following the public backlash to the $2,500 fine earlier this month, PayPal insisted the policy had been sent out “in error” and included “incorrect information.” PayPal, the company said, was “not fining people for misinformation and this language was never intended to be inserted into our policy.” 

However, the reinsertion of the controversial language suggests that this is indeed what the company originally intended.

The payment processor recently came under fire from British politicians for allegedly engaging in politically-motivated censorship, and some MPs have threatened to introduce legislation that would bar PayPal and other companies like it from freezing users’ accounts for political reasons.