PayPal quietly reinstates $2,500 ‘misinformation’ fine policy with added penalties: report

Editor’s Note:  This post was updated after the report that PayPal reinstated a fine for spreading misinformation was refuted, noting that user agreement policies have been in place at the company for years. 

“In a statement, a PayPal spokesperson told VERIFY that the company’s policies are not new, ‘nor has the intent of this provision changed.’ The company’s current user agreement was last updated on Sept. 19, 2022, more than a month before these claims spread online,” Verify reported.

PayPal has reportedly quietly reinstated its controversial $2,500 fine for anyone caught spreading allegedly “false, inaccurate or misleading information.”

Available for review here, PayPal’s policy statement clearly lists providing “false, inaccurate or misleading information” as a “restricted activity.”

Regarding all “restricted activities” in general, the policy statement then notes that any seller caught committing one of these activities agrees to fork over $2,500.

“If you are a seller and receive funds for transactions that violate the Acceptable Use Policy, then in addition to being subject to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by your violation of the Acceptable Use Policy,” the policy reads.

“You acknowledge and agree that $2,500.00 U.S. dollars per violation of the Acceptable Use Policy is presently a reasonable minimum estimate of PayPal’s actual damages,” it continues.

The policy also warns that PayPal may hold onto a user’s full remaining balance for up to 180 days if they violate any of its policies, including the information one.

“Holding the balance in your Balance Account, the balance in your business account, or any money waiting to be claimed through your personal account if you do not have a Balance Account linked to your personal account, for up to 180 days if reasonably needed to protect against the risk of liability or if you have violated our Acceptable Use Policy,” the policy reads.

Thanks to reports that PayPal was “reinstating” this policy, it’s now once again facing a boycott:

The alleged re-emergence of the $2,500 stipulation is a big deal because PayPal previously removed the stipulation based on its publication having allegedly been a mistake.

Around the start of the month, PayPal published an official policy update warning that anyone caught spreading alleged “misinformation” would be fined $2,500.

The policy change provoked massive outrage from the right and a little bit from the left. In response, PayPal nixed the policy and claimed it’d made a mistake.

“An AUP notice recently went out in error that included incorrect information. PayPal 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 this has caused,” a spokesperson said at the time.

AUP is short for “Acceptable Use Policy.”

Many of PayPal’s critics didn’t accept the apology and decided to delete their accounts anyway. Others accused the company of purposefully waiting until the controversy died down to reintroduce the controversial stipulation that had triggered outrage in the first place.

But PayPal’s policies prohibiting providing “misleading information” and the $2,500 fine for violations have reportedly been in place since at least 2015.

According to Verify:

Using The Wayback Machine, a digital archive tool, VERIFY found that PayPal’s user agreement has included policies that prohibit providing “misleading information” in connection with the platform, as well as language that outlines the company’s right to assess $2,500 in damages for violations of its policies, since at least 2015. The word “misinformation” does not appear in the user agreement.

 

When asked about the policy, a spokesperson said PayPal doesn’t fine customers for violating its Acceptable Use Policy but the intent is to protect them from “illicit and fraudulent activity from sellers.”

“In some situations, sellers may be liable for damages associated with investigatory costs when they engage in activities that violate the company’s policy, like fraud, counterfeiting or other illegal activity,” the spokesperson told Verify.

The language of the policy appears to be an issue. It used to be a violation to “promote misinformation.” Now it’s a violation to spread “false, inaccurate or misleading information.” The problem is they both mean the exact same thing. And this itself is a problem because there’s no definitive definition of what’s false and misleading.

Recall that last year, it was considered misleading and false to say that the COVID vaccine doesn’t prevent the transmission of the coronavirus. Yet now it’s known that this was true after all.

Likewise, recall that in 2020, it was considered misleading and false to say that COVID lockdowns were harmful. Yet now it’s known that was true as well.

“An analysis from a trio of economists says pandemic lockdowns during the first wave of the COVID-19 pandemic did little to reduce the number of COVID-related deaths. Lockdowns in the United States and Europe reduced COVID-related deaths by only .2%, and shelter-in-placed orders reduced deaths by 2.9%, the study says,” according to a WebMD report published in February.

See the problem?

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Vivek Saxena

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