PayPal will continue to penalize “false, inaccurate or misleading information”

Rumors that PayPal, the world’s third largest payment platform, has reinstated a controversial policy of fining its users for “misinformation” has once again made the rounds on Twitter.

The uproar, however – which has attracted many popular crypto influencers – seems to be about old news.

BREAKING: 🛑 PayPal has brought back the $2,500 fine for speech they don’t like.

First they said it was a mistake.

Now they sneak it back in with different language.

🛑 DO NOT ACCEPT THIS! 🛑

– Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) October 27, 2022

The dispute concerns a passage in the section “Restricted Activities“PayPal’s user agreement, which states that users who violate its acceptable use policy are required to pay a minimum of $2,500 in damages.

The acceptable use policy includes a list of “prohibited activities“, which includes transactions related to “the promotion of hatred, violence, racial or other forms of discriminatory intolerance.“

Twitter user Jeremy Knauff drew attention to this passage on Tuesday, claiming that PayPal had indeed reinstated a “misinformation“which had drawn widespread criticism earlier this month – a clause that PayPal retracted after saying it had been published”by mistake“.

Remember the draconian clause PayPal added to its TOS a couple of weeks ago that would enable them to steal $2,500 from your account every time you post anything they don’t like? Well, after the widespread criticism died down, they put it right back in.https://t.co/QwUsB56p0L

– Jeremy Knauff (@jeremyknauff) October 25, 2022

“The term “other forms of intolerance” is so broad that it legally gives the company grounds to claim that anyone who does not fully support a particular position is being “intolerant” because the definition of the word is the refusal to accept views, beliefs, or behavior that differ from one’s own“, said Knauff in an article on the subject.

In reality, however, the “misinformation” has not been reinstated, and no other changes have been made to the policy page since PayPal’s retraction a week ago.

As KellyKga explained on Twitter, the controversial passage published on October 7 – and removed the next day – was intended to prevent users from using PayPal for activities involving “sending, posting or publishing” of content meeting certain criteria.

Among those criteria are content that, according to PayPal, is “harmful, obscene, harassing or objectionable” or which “promote misinformation“, among other things. This entire passage had been removed from the acceptable use policy and is now only available in the Internet archive.

In contrast, the clause that Knauff and others challenged this week is not a new policy at all. The list of prohibited activities and the associated $2,500 fine have existed since September 2021.

This box in red is what they tried to add and then removed earlier this month after public outcry. The highlighted part was there in previous versions of the AU policy, wasn’t removed, and is still there. pic.twitter.com/Ve8f8z4Foo

– Kelley K (@KelleyKga) October 27, 2022

Yet the story gets even more complicated: While Paypal’s current acceptable use policy contains no mention of “misinformation“, its user agreement essentially contains one, and has since at least February 12, 2022.

The contract states that PayPal users may not “provide false, inaccurate or misleading information” in connection with PayPal, its website, its services or “third parties“. Violators may have their accounts suspended, restricted, or closed, and PayPal may take legal action.

In short, there were no surprising changes to PayPal’s policy this week. Although the company does impose penalties on users for some forms of “misleading statements” in its user agreement (and has been for months), a $2,500 fine is not explicitly part of it.