June 25, 2018

June 25, 2018

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June 22, 2018

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FTC Gives Final Approval to PayPal Settlement Related to Allegations Involving its Venmo Payment Service

The FTC gave final approval to the Venmo/PayPal settlement resolving alleged violations of Section 5 of the FTC Act and the Gramm-Leach-Bliley Act’s Privacy and Safeguards Rules. As described in a previous blog post, the FTC alleged that Venmo made a variety of misrepresentations to consumers with respect to the availability of funds, the ability of consumers to control the privacy of their transactions, and its data security practices.

The settlement includes injunctive relief that prohibits Venmo from misrepresenting any material restrictions on the use of its services, the extent of control provided by any privacy settings, and the extent to which Venmo implements or adheres to a particular level of security. In addition, Venmo is required to make certain disclosures to consumers about its transaction and privacy practices. Finally, Venmo is required to obtain biennial third-party assessments of its compliance with these rules for 10 years.

During the comment period, the FTC received eight comments. Some of the comments expressed frustration with Venmo’s practices and the fact that Venmo was not required to pay a monetary penalty. The Commission’s responses noted that Section 5 of the FTC Act and the Gramm-Leach-Bliley Act does not authorize the FTC to collect fines or penalties based on such violations and noted that if PayPal violates the final order it could be liable for civil penalties of up to $41,484 per violation.

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About this Author

Katherine Armstrong, Drinker Biddle Law Firm, Washington DC, Data Privacy Attorney
Counsel

Katherine E. Armstrong is counsel in the firm’s Government & Regulatory Affairs Practice Group where she focuses her practice on data privacy issues, including law enforcement investigations, and research and analysis of big data information practices including data broker issues.

Katherine has more than 30 years of consumer protection experience at the Federal Trade Commission (FTC), where she served in a variety of roles, including most recently as a Senior Attorney in the Division of Privacy and Identity Protection.  In the Division of...

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