Hawaiʻi Office of Consumer Protection reaches $6 million settlement with PayPal

The Hawaiʻi Department of Commerce and Consumer Affairs Office of Consumer Protection has reached a $6 million settlement with PayPal Inc. and PayPal Holdings Inc.

The settlement resolves the office’s lawsuit, filed in December 2022, alleging unfair and deceptive acts or practices through PayPal’s operation of the PayPal and Venmo e-payment platforms. PayPal has denied the claims, but it will pay $6 million to resolve the lawsuit.

The lawsuit alleged violations of the state’s consumer protection laws, including that, to encourage consumers to make and receive payments on PayPal and Venmo, PayPal deceptively advertises that it provides broad “Purchase Protection” for goods-and-services transactions on Venmo, privacy for Venmo users’ sensitive financial information, consistent and easy access to funds, and platforms safe from scams and fraud.

“Hawaiʻi consumers depend on PayPal and Venmo for critical daily tasks like paying rent, receiving wages and compensating child care providers. This settlement is an important step forward in safeguarding the financial marketplace,” said Executive Director of the Office of Consumer Protection Mana Moriarty.

A representative from PayPal added, “PayPal takes our responsibility to our customers very seriously, and we continually enhance our products and communications to improve the customer experience. We share the same goal as the state of Hawaiʻi to empower and protect consumers, and are pleased to have reached an agreement on this matter.”

The Hawaiʻi Office of Consumer Protection was assisted in this action by L. Richard Fried Jr. and Patrick McTernan of Cronin, Fried, Sekiya, Kekina & Fairbanks and Emmy Levens, Molly Bowen, and Diane Kee of Cohen Milstein Sellers & Toll PLLC.