Following PR Crisis, PayPal Again Updates TOS Hoping You Won’t Notice

By Jeremy Knauff Jeremy Knauff has been verified by Muck Rack's editorial team
Published on October 25, 2022

As far as PR crises go, PayPal has gotten itself into quite the predicament.

On October 8th, the company updated its terms of service agreement to include a clause enabling it to withdraw $2,500 from users’ bank accounts simply for posting anything the company deems as misinformation or offensive.

Unsurprisingly, the backlash was instant and massive.

Who would have guessed that consumers don’t want a company trying to police their speech by threatening to drain their bank accounts for saying something the company doesn’t like? Well, apparently everyone except the executives and legal team at PayPal.

Aside from the fact that the clause is a fool’s errand because there is literally no way for the company to legitimately determine what is or isn’t misinformation, and that “offensive” is subjective, there is no legal basis for a clause like this anyway. PayPal has no legal right to dictate activity that happens outside of its own platform, especially when that activity has zero impact on PayPal.

This is yet another case of big tech overreach.

Many of the people behind these companies have mistakenly convinced themselves that they are the arbiters of truth, and have set out on a mission to silence anyone who doesn’t share their fringe views, and consumers are tired of it.

The public’s response was swift, with users not only sharing their opinions on social media, but also canceling their accounts.

One entrepreneur, Tony Whatley, who runs several mastermind groups, closed his account that day and canceled the tens of thousands in monthly recurring fees for the members in the groups his business processes through PayPal.

Tony Whatley PayPal

Financial titan and Fox Business host, Charles Payne, stepped up and canceled his account as well, but by this point, PayPal had begun fighting account closures by introducing additional steps and even outright ignoring customers.

There were countless others following suit. In fact, Google searches for “delete PayPal” spiked 1,392% after the announcement, according to Google Trends. And as the situation continued to unfold, the company’s stock price continued to plummet.

By the following day, PayPal’s PR team was in full crisis mode and trying to spin the story as a “simple mistake” that was never meant to be included in the terms of service. But most people saw through this because any rational person knows it had to pass through multiple phases of review by multiple teams before being finally inserted into the terms of service and published online. No one bought the story they tried to push.

The bigger story, though, is that despite it’s PR team publicly claiming it was just a simple mistake that that was never intended to be published, shortly after the criticism on social media died down, it was added back into the terms of service with equally ambiguous language. Apparently, they believed that everyone would just accept their claim and immediately forget about the incident.

PayPal TOS

So the clause that was a mistake and was never intended to be included in PayPal’s terms of service magically ended up back in there once the criticism died back down. That sounds plausible, right? And as for what constitutes a “violation” of the company’s terms of service, the language is so vaguely worded that it could encompass literally anything.

PayPal - Prohibited Activities

The term “other forms of intolerance” is so broad that it legally gives the company grounds to claim that anyone not fully supporting any particular position is engaging in “intolerance” because the definition of the word is the unwillingness to accept views, beliefs, or behavior that differ from one’s own. So essentially, this clause gives PayPal the perceived right to withdraw $2,500 from users accounts for voicing opinions that PayPal disagrees with.

As news of PayPal’s most recent revision spreads, I anticipate that the company’s PR disaster will grow, and with numerous competing payment platforms available today, this could deliver a devastating and well deserved blow to the company.

By Jeremy Knauff Jeremy Knauff has been verified by Muck Rack's editorial team

Journalist verified by Muck Rack verified

Jeremy Knauff ran a successful digital marketing agency for nearly two decades until a health crisis nearly killed him and destroyed his business.He then rebuilt from that devastating loss by developing a process that his agency now uses to help clients get featured in the media so they can become a recognized authority in their industry, attract more clients, and earn more money.Knauff is a speaker, author, founder of the PR firm, Spartan Media, and a Marine Corps veteran.

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