Paypal Australia Unit Used Unfair Term in Small Business Contracts, Court Finds

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PayPal's local unit in Australia reportedly used an unfair term in its standard contracts with small business clients who failed to notice overcharging errors.

PayPal Unfair Term Against Small Businesses

Australian Securities & Investments Commission (ASIC) announced on Friday, July 5, that a federal court deemed the term unjust because it required users to accept overcharged costs as accurate if they did not notify PayPal of the error within 60 days.

9News reported that from September 21, 2021, to November 7, 2023, that condition was part of its small business contracts.

According to Reuters, ASIC Deputy Chair Sarah Court said the decision reminds companies that unfair contract terms will not be tolerated and that ASIC will take decisive action to protect consumers and small businesses.

Read Also: PayPal Launching New Advertising Platform That Analyzes Users' Shopping Habits

 Paypal Australia Unit Used Unfair Term in Small Business Contracts, Court Finds
PayPal's Australian branch reportedly used an unfair term in its standard contracts with small business clients, according to a federal court. ERIC PIERMONT/AFP via Getty Images

PayPal Helps ASIC With Its Inquiry

PayPal reportedly helped ASIC with its inquiry at no cost to the agency. The regulator claimed that on November 8, 2023, PayPal willingly withdrew the term in question from its contracts after agreeing that it was unfair, consenting to the disclosures, and making the necessary arrangements.

Furthermore, the court mandated that PayPal cover the expenses of the ASIC's case.

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Australia, Paypal

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