No, PayPal won’t fine people for spreading misinformation

Payment company PayPal was criticized recently by people on social media after a version of the company’s Acceptable Use Policy (AUP) was posted to its website that said the company could automatically charge people a fine of $2,500 for spreading misinformation.

The document was dated Nov. 3, 2022, and included a full list of prohibited activities, including spreading misinformation. 

After the document went viral, #boycottpaypal and #byebyepaypal trended on Twitter.

Former PayPal President David Marcus tweeted: “It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP [Acceptable Use Policy] goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity.”

Elon Musk, one of PayPal’s original top investors, tweeted a response, just saying, “Agreed.” 

VERIFY viewers Bill and Ricardo messaged us to ask if it was true PayPal was changing its policies and that users would be fined for spreading misinformation.

THE QUESTION

Is PayPal planning to fine people $2,500 for spreading misinformation?

THE SOURCES

• PayPal
• The Wayback Machine, a digital archive tool

THE ANSWER

No, PayPal is not planning to fine people $2,500 for spreading misinformation.

WHAT WE FOUND

“An Acceptable Use Policy (AUP) notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We’re sorry for the confusion this has caused,” a PayPal spokesperson told VERIFY in an email.

PayPal’s AUP is posted to the company’s legal section of its website and outlines the rules for using PayPal. The company prohibits people from making certain transactions, like purchasing weapons, controlled substances or stolen goods. PayPal also says its platform can’t be used for “get rich quick” schemes or for bribery. 

The AUP dated Nov. 3, 2022, appeared on Paypal's site, and an archive was found by VERIFY using The Wayback Machine. That version included language about misinformation. 

That section read:

You may not use the PayPal service for activities that: 

… involve the sending, posting, or publication of any messages, content, or materials that, in PayPal’s sole discretion, (a) are harmful, obscene, harassing, or objectionable, (b) depict or appear to depict nudity, sexual or other intimate activities, (c) depict or promote illegal drug use, (d) depict or promote violence,  criminal activity, cruelty, or self-harm (e) depict, promote, or incite hatred or discrimination of protected groups or of individuals or groups based on protected characteristics (e.g. race, religion, gender or gender identity, sexual orientation, etc.) (f) present a risk to user safety or wellbeing, (g) are fraudulent, promote misinformation, or are unlawful, (h) infringe the privacy, intellectual property rights, or other proprietary rights of any party, or (i) are otherwise unfit for publication.

The document also said PayPal may “subject you to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account(s) as outlined in the User Agreement.” That means that if you were to be sued for violating any of these policies while using PayPal, the company could recover $2,500 in damages. It is not a fine.

The version of the AUP, dated Nov. 3, 2022, which PayPal said was published in error, has since been removed. 

The current U.S. PayPal AUP, dated Sept. 21, 2021, does not include anything about spreading misinformation in the list of prohibited activities.

So, we can VERIFY, PayPal is not fining people $2,500 for posting misinformation. 

Correction: A previous version of this story said the current PayPal Acceptable Use Policy did not include information that $2,500 in damages may be recovered if someone violates PayPal’s terms of use. That policy was actually a United Kingdom policy; the current U.S. policy does reference that monetary amount. The current PayPal Acceptable Use Policy still does not list spreading misinformation as a policy violation.