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Digital Identity, Security & Online Fraud

PayPal settles charges over alleged Venmo disclosure failure

Thursday 1 March 2018 | 01:33 PM CET

PayPal has settled US charges for failing to give critical disclosures to users regarding privacy and the availability of funds transferred into a Venmo account.

The Federal Trade Commission said that Venmo, PayPal’s peer-to-peer payments app, would sometimes notify users that deposits had been made to their Venmo accounts and could be transferred to their banks. But, at times, when users tried to make that transfer, Venmo either froze the account or sometimes reversed the payment. This meant that some users were unable to pay bills and suffered financial hardship, the FTC said.

The agency also alleged that Venmo at times misrepresented what actions were needed to keep transactions private, resulting in disclosures that users did not want, the FTC said.

According to Reuters, the FTC said in a statement that the alleged actions violated federal law aimed at protecting consumer information. PayPal was not required to pay any money as part of the settlement, but, Venmo must submit to third-party reviews of its compliance with privacy rules for 10 years.

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