CFPB Investigates Venmo’s Money Transfer and Debt Collection Policies | Man’s pepper with trout

0

In a recently filed case Form 10-K, PayPal Holdings, Inc. (PayPal) announced that it received a Civil Investigation Request (CID) from the Consumer Financial Protection Bureau (CFPB) on January 21 “relating to Venmo’s unauthorized fund transfer and recovery processes, and related matters ”. PayPal owns and operates Venmo as part of its digital wallet portfolio.

Although the CID is not accessible to the public, The Wall Street Journal reported in March 2019 that “[i]In an effort to reduce losses on its platform, Venmo is threatening debt collectors on certain users who have negative balances on their accounts, according to customer service emails reviewed by The Wall Street Journal. Venmo also recently changed its user agreement to give itself the power to collect money its customers owe by entering it into their other PayPal accounts.

This survey may be our first sign of a more aggressive CFPB impacting the payments industry. In a recent report titled “Federal Policy Outlook 2021, ” Troutman’s Pepper Strategies predicts that the “Biden-run CFPB will attempt to strengthen monitoring of targeted predatory lending, credit and lending.”

While collection practices may be the main topic of CFPB’s CID, keep in mind that these types of federal investigations can create unwanted exposure to similar issues for other digital portfolio companies and related products. In addition to the risk of federal investigations, this type of review could also attract the attention of state attorneys general who actively enforce consumer protection laws, such as debt collection laws or unfair acts and practices. or misleading. We will continue to monitor any development.


Source link

Share.

About Author

Comments are closed.