UPDATED: PAYPAL REVERSES COURSE AFTER CRITICISM–More below

PayPal Reverses Plan To Fine Users $2,500 For ‘Misinformation’ After Daily Wire Report https://t.co/Cb1NpLdItr

— Daily Wire News (@DailyWireNews) October 8, 2022

Well this is troubling. Very troubling.

PayPal is updating its terms of service come November 3rd, 2022, and they have inserted a clause that should give each and every one of us pause. A lot of pause, actually.

Along with prohibiting using the service to do illegal things–something that should be expected–PayPal now prohibits using the service for anything that appears to them to violate this policy:

In PayPal’s sole discretion.

A new PayPal policy update appears to authorize the company to pull a significant sum of money from the accounts of users who spread “misinformation.”

Effective November 3, the new conditions will be added to the restricted activity section of the PayPal User agreement, the Daily Wire first reported. Changes include prohibitions on “the sending, posting, or publication of any messages, content, or materials” that “promote misinformation.” While the prior policy already forbade “hate,” “intolerance,” and discrimination,  the new one now also explicitly applies to specific “protected groups” and “individuals or groups based on protected characteristics.” Identities under this umbrella include race, religion, gender or gender identity, and sexual orientation.

“The promotion of hate, violence, racial or other forms of intolerance that is discriminatory” would also be deemed a violation of the policy and possible grounds for penalty,” according to the soon-to-be-launched acceptable use policy. The financial tech firm’s current rulebook doesn’t cite these activities.

Breaking the rule against misinformation and hate speech “may subject you to damages, including liquidated damages of $2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account,” the company warns. In a user agreement, account holders accept and attest that the penalty is “presently a reasonable minimum estimate of PayPal’s actual damages” due to the expense the firm incurs by accounting for the violations as well as damage to its reputation.

“Under existing law, PayPal has the ability as a private company to implement this type of viewpoint-discriminatory policy,” Aaron Terr, a senior program officer at the Foundation for Individual Rights and Expression, told the Daily Wire.

Now it isn’t clear whether or not PayPal will chose to punish you for activities that don’t directly involve the company, but there is absolutely nothing that will prevent them from doing so. In fact, PayPal can do pretty much whatever they want. They banned Gays Against Groomers, for instance. Now the only thing that will prevent them from banning you for being a conservative is the difficulty of monitoring everybody.

But if somebody complains? Who knows?

PayPal's new acceptable use policy, beginning November 3, 2022, will enable the company to withdraw $2,500 from your account if they find anything you've said to be objectionable, including "misinformation" or "discrimination" of groups or individuals based on gender identity.

— Ian Miles Cheong (@stillgray) October 8, 2022

Further, there is no question about whether or not PayPal could and would freeze your account if you use it to sell merchandise such as meme mugs they don’t like or to support a YouTube channel they disapprove of.

This isn’t just limited to kicking you off their service. They can choose to fine you by seizing any funds that they have access to in your account, and when closing down your account they can hold your money for 6 months and pretty much taking as much of it as they want. In fact they have done so to conservative YouTube providers already.

Merchants can be fined $2500 per violation of PayPal’s Acceptable Use Policy. When PayPal comes after you for one violation, they’re likely on the lookout for multiple infractions—so you could get hit with several $2500 fines at once or within a short timeframe.

Not only is $2500 a significant fine for small businesses, but there’s also no clear list of violations that result in the fine. So, many business owners are operating somewhat blindly, hoping that they aren’t breaking any of PayPal’s ill-defined rules.

Perhaps the biggest problem with PayPal’s Acceptable Use Policy is that it’s open to interpretation. PayPal uses vague language to define “acceptable use” so they can freeze or charge your business account at their own discretion.

Withholding Funds for Banned Accounts

Furthermore, if PayPal decides to ban your account altogether for violating the Acceptable Use Policy, they can hold the funds in your account hostage for up to 180 days. That’s almost six months during which not only is your account closed down, forcing you to look for alternative methods for customers to pay you, but your cash is tied up for no good reason. Unfortunately, that’s often enough to cripple a business and force you to close up shop.

Lack of Appeals Process

PayPal creates their own Acceptable Use Policy, which effectively allows them to play by their own rules. Their payment processing services are unregulated compared to full-service merchant services providers. That means merchants have no legal recourse to resolve these issues or get their funds reimbursed.

To make matters worse, there is no defined appeals process. They can ban you without warning, potentially without allowing you to cash out your account balance for six months. Plus, they can fine you multiple times to deplete your balance—and there’s not much you can do to stop them.

I have written about PayPal using its power as a payment processor to freeze out politics they don’t care for. It appears that they are expanding their policies to freeze out even more.

And, as I suggested, should they choose they now have the right at their sole discretion and with no warning at all choose to seize your cash if they decide you are an undesireable, or even a deplorable.

I use PayPal all the time because it is convenient to do so. I have had an account pretty much since they opened up. I suspect I even used them when Elon Musk owned a good chunk of them, ironically enough.

Musk is buying Twitter because he believes that it should be more of a free speech platform. Wouldn’t it be ironic if near the time the deal closes the company that set him on the path of becoming one of the wealthiest people on the planet became a primary means by which the Leftist establishment tightens up the incipient social credit system that will strangle that speech for most people who use the Internet for commerce?

UPDATE via the Daily Wire:

“An [Accepted Use Policy] notice recently went out in error that included incorrect information,” a PayPal spokesperson said. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We’re sorry for the confusion this has caused.”

The original announcement said PayPal would expand its “existing list of prohibited activities” on November 3. Among the changes were prohibitions on using the platform for “the sending, posting, or publication of any messages, content, or materials” that “promote misinformation” or “present a risk to user safety or wellbeing.” Users were also barred under the policy from “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory.”

Before posting its initial story, The Daily Wire reached out to PayPal for definitions of the added terms but received no response.

The report sparked outrage online, with many people tweeting pledges to dump the online payment facilitator. Particularly chilling was the fact that the policy said determinations of what could be deemed “misinformation,” or a threat to the “wellbeing” of other users was to be at the “sole discretion” of PayPal. The now-aborted policy said users could be liable for “damages” — including the removal of $2,500 “debited directly from your PayPal account” per offense.

More:

The announcement and reversal comes days after PayPal canceled three accounts linked to Toby Young, a commentator who runs a nonprofit called Free Speech Union. The organization has defended clients such as actor and comedian Russell Brand, who recently moved his show from YouTube to Rumble in reaction to censorship from the former platform.

Platforms such as Amazon, Twitter, and Facebook have censored conservatives over their positions on controversial social issues, including transgenderism, vaccination mandates, and homosexuality. GoFundMe seized millions in funds raised for trucker protests in Canada earlier this year, while Google recently began suppressing search results for crisis pregnancy centers.

Lessons?

• Assume nothing: anything you have can be taken away if you aren’t vigilant
• FIGHT BACK! Sometimes you can actually win