From Bloomberg Law:
PayPal Inc. falsely touts its “Pay in 4″ installment program to low-income customers as a free service, failing to disclose that they can incur large overdraft fees on their linked bank accounts, a Florida man alleges in a new proposed class suit.
According to the PayPal website, app, and advertisements online including on social media, the service—which splits the purchase price over four payments—is completely free, with no interest or hidden fees, the suit alleges.
But there are often huge “late fees” and significant interest, albeit not assessed by PayPal, in the form of overdraft and insufficient-funds fees assessed by banks processing Pay in 4 payments, Felipe Vidaurre alleges in a suit filed Tuesday in the U.S. District Court for the Northern District of California.
Overdraft fees are a highly profitable part of the banking sector that exclusively targets the very poor, he alleges.
Continue reading PayPal Hides Pay-Later Plan’s Overdraft Fee Risk, Suit Says on Bloomberg Law
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