On February 27, 2018, the Federal Trade Commission (FTC) announced¹ that it had reached an agreement with PayPal to settle allegations that its peer-to-peer payment service, Venmo, engaged in deceptive acts and practices and violated the Gramm-Leach-Bliley Act (GLBA)’s Safeguards Rule² and Privacy Rule.³ Since 2011, Venmo has offered peer-to-peer payment services through an app that consumers can download, link to their external bank accounts, and use to transfer and receive money to and from other users. In its complaint, the FTC alleged that PayPal, through Venmo, failed to adequately disclose that: (1) it could freeze or remove funds credited to a customer’s account; (2) the Default Audience Setting did not ensure that future transactions were visible only to chosen audiences; and (3) the Individual Audience Setting did not ensure that any single transaction was visible only to the chosen audience. The FTC also alleged that PayPal, through Venmo: (1) misrepresented that it protected consumers’ information with “bank-grade security systems;” (2) failed to protect the security, confidentiality, and integrity of customer information in violation of the GLBA’s Safeguards Rule; and (3) failed to send an adequate initial privacy notice to customers detailing its privacy policies and practices in violation of the GLBA’s Privacy Rule.⁴
Continue Reading FTC Announces Settlement with PayPal for Alleged FTC Act and GLBA Violations by Venmo