![]() ![]() (People without an account could still see a user’s Venmo account either by clicking on a link to the user’s Venmo profile page or by using a search engine.)Ĭonsumers who didn’t want to share their transactions could go to a Venmo menu to edit their privacy settings. By default, their five most recent ones were visible to anyone on that page, including visitors who don’t have a Venmo account. In addition, each Venmo user has a profile page that lists their Venmo transactions. That includes the names of the payer and the recipient, and the accompanying message. By default, all peer-to-peer transactions on Venmo are displayed on Venmo’s social news feed. Consumers’ access to funds wasn’t the FTC’s only concern. The FTC alleges that Venmo’s failure to adequately disclose to consumers that funds could be frozen or removed from their accounts was deceptive. The complaint alleges that even in the face of mounting consumer complaints, Venmo continued to claim – without any qualifiers – that once money was credited to consumers’ Venmo accounts, users could transfer it to their bank accounts. Many people reported that the company’s practices resulted in significant financial hardship – for example, not being able to pay their rent even though it appeared they had enough in their Venmo account to cover it. Those delays and losses led thousands of consumers to complain to Venmo. For many consumers, once Venmo undertook that review, it resulted in delaying the transfer or even reversing the transaction altogether. That’s because Venmo waited until a consumer attempted to transfer funds to his or her external bank account to review the transaction for fraud, insufficient funds, or other problems. The complaint alleges that in many instances, consumers weren’t able to transfer funds as promised. According to the complaint, the company’s representations led many consumers to believe that when they received payment notifications from Venmo, the funds were ready to be transferred to their bank account. Transfer to your bank overnight” or someone “paid $ to your Venmo balance – Leave it in Venmo or transfer it to your bank account.” The language changed over time, but Venmo typically said things like “Money credited to your Venmo balance. Within seconds, the recipient gets a notification about the transaction. Users must include a short message with each transaction. To initiate a transaction, he or she either sends money to the other user or submits a “charge request” that asks the person to pay. So let’s say a Venmo user wants to pay another user $10 for that pizza or to get the other person to kick in their $10 share. They can receive money from other Venmo users, transfer money to them, or transfer some or all of their Venmo balance to their bank account. When consumers download the Venmo app, they create an account connected to their bank account or credit or debit card. A proposed settlement in the case requires Venmo to make clear disclosures about certain business practices. In addition, the lawsuit challenges aspects of the company’s privacy and security practices. An FTC complaint against peer-to-peer payment service Venmo – now operated by PayPal – alleges that the company failed to disclose material information about the availability of consumers’ funds. But as innovative technologies change how people pay for things, established consumer protection principles apply. About the FTC Show/hide About the FTC menu itemsĪdvances in payment methods could end those open-wallet debates about who owes what for the pizza.News and Events Show/hide News and Events menu items.Advice and Guidance Show/hide Advice and Guidance menu items.Competition and Consumer Protection Guidance Documents.Enforcement Show/hide Enforcement menu items. ![]()
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