PayPal (NASDAQ:EBAY) is being fined $25 million for illegally signing up its customers to a line of credit.
The Consumer Financial Protection Bureau (CFPB) issued the fine on the online wallet for PayPal’s Bill Me Later program. It essentially offers users the chance to buy items with credit and pay for them at a later date with interest and fees.
The agency says PayPal signed customers up for Bill Me Later using deceptive advertising and mishandling billing problems.
“PayPal illegally signed up consumers for its online credit product without their permission and failed to address disputes when they complained,” said CFPB Director Richard Cordray in a statement from the Bureau.
PayPal will pay $15 million in refunds to its customers plus an additional $10 million in fees to the federal government.
The company issued a statement saying it focuses on offering a product that uses clear language in compliance with the law.
EBAY stock is down 0.2% Wednesday.
