"The CFPB alleges that many consumers who were attempting to enroll in a regular PayPal account, or make an online purchase, were signed up for a credit product without realizing it," the bureau writes. "The company also failed to post payments properly, lost payment checks, and mishandled billing disputes that consumers had with merchants or the company. Tens of thousands of consumers experienced these issues."
Specifically, the CFPB claims that PayPal deceptively advertised promotions, abusively charged deferred interest, enrolled people in PayPal Credit without their knowledge or consent, forced customers to use PayPal Credit, engaged in illegal billing practices and mishandled disputes. The CFPB has the authority to take action against companies engaging in unfair and abusive business practices under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The "affected consumers" in this case are, generally, "any consumer identified by the Bureau and Defendants who paid late fees or interest charges between January 1st, 2011, and May 1st, 2015," the proposed consent order reads.
PayPal recently agreed to pay the US Department of Treasury $7.7 million after processing payments for numerous individuals and companies on the US sanctions list.
For an in-depth look at the CFPB's allegations against PayPal Credit, see the full complaint (PDF) and proposed consent order (PDF).