PayPal has settled with the FTC (the United States financial regulations authority) regarding a problems with the subsidiary Venmo. PayPal has not had to pay a fine as part of the agreement.
PayPal owns the peer-to-peer payments app Venmo and reached an agreement with the Federal Trade Commission after charges were made that it failed to give vital assurances to users regarding privacy and the availability of funds transferred into a Venmo account.
The FTC said that they might sometimes notify users of the app that deposits had been made to their Venmo accounts and were available to be transferred to their bank accounts. But, they reported, when users tried to make that transfer, the app could sometimes freeze the account and also reversed the payment on occasion.
The FTC said in a statement that the alleged actions violated federal law aimed at protecting consumer information and that as part of the proposed settlement Venmo must submit to third-party reviews of its compliance with privacy rules for 10 years, among other actions. The alleged data breaches and problems occurred before PayPal acquired the company back in 2013.
We are pleased to conclude this process with the FTC in a cooperative way. As a core part of PayPal’s and Venmo’s business and operations, we’ve taken steps to significantly strengthen our privacy and data security practices.
– Amazed Miller, PayPal head of corporate communications
