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New PayPal rule: The company can take $2,500 from your account for sharing misinformation (UPDATE)

Updated Oct 9th, 2022 9:00PM EDT
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Image: Justin Sullivan/Getty Images

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A little less than a week before the midterm elections in November, a new PayPal account update will take effect that has sent the internet into an uproar — and also drawn condemnation from PayPal’s former president David Marcus.

What’s happening: PayPal is updating its acceptable use policy, with the update taking effect on November 3. You might say to yourself, well, I don’t use my account with the financial services company for anything improper or illegal, so what do I have to worry about? Here’s why that might not necessarily be true:

PayPal says it’s expanding its existing list of prohibited activities to include the “sending, posting, or publication of messages, content, or materials that meet certain criteria.” The full details are explained right here, but PayPal is basically set to start levying a fine when users are found to have shared “misinformation” or promoted content that’s deemed to be “discriminatory” or promoting “hate.”

PayPal account update

The list of prohibited activities is broader than that, but it’s especially the prohibition on sharing “misinformation” that’s giving many people pause. Moreover, PayPal gives itself the right to debit $2,500 from your PayPal account for each violation of this new, expanded acceptable use policy.

Marcus, for his part, described this new policy as “insanity.” A tweet from him on Saturday, October 8, reads in part: “A private company now gets to decide to take your money if you say something they disagree with.” Venture capitalist David Sacks chimed in, in response to Marcus: “Get your money out of PayPal right now.” Elon Musk, an erstwhile member of the OG “PayPal Mafia,” also added his approval to Marcus’ tweet, writing simply: “Agreed.”

As word of this PayPal change began to spread over the weekend, FCC Commissioner Brendan Carr described what’s happening here as “Orwellian.”

“PayPal reserves the right to take your money if you post a message that PayPal decides is “misinformation,'” he tweeted. “This is why it is so vital that state and federal legislatures pass laws that prohibit discrimination by tech companies and protect free speech.”

UPDATE (9/8/2022)

  • After this post was published, PayPal released a statement to media outlets insisting that the company will not, in fact, fine users for the dissemination of misinformation: “An AUP notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused.”
  • BUT: As of the time of this writing on Saturday night, October 8, the language noted in the post above is nevertheless still included in PayPal’s user agreement (here). The apology has also struck many people as odd, because you’d think that language like this wouldn’t accidentally materialize — in precisely constructed corporate-speak — on a policy page “in error” or randomly. Especially when PayPal has already more or less gone down this road before, deplatforming account-holders for reasons similar to what this new policy language spells out.
Andy Meek Trending News Editor

Andy Meek is a reporter based in Memphis who has covered media, entertainment, and culture for over 20 years. His work has appeared in outlets including The Guardian, Forbes, and The Financial Times, and he’s written for BGR since 2015. Andy's coverage includes technology and entertainment, and he has a particular interest in all things streaming.

Over the years, he’s interviewed legendary figures in entertainment and tech that range from Stan Lee to John McAfee, Peter Thiel, and Reed Hastings.