PayPal retracts its policy to fine users for misinformation posts

The online payment platform denied plans to deduct $2,500 from users’ accounts for spreading misinformation after facing an immense backlash on social media.

A spokeswoman for the company holding a microphone - stock photo.

On Saturday, news of the controversial clause spread on Twitter after PayPal posted the update of the Acceptable Use Policy (AUP) that expanded the list of “prohibited activities” to include “the sending, posting, or publication of any messages, content, or materials” that “promotes misinformation.”

"Violation of this Acceptable Use Policy constitutes a violation of the PayPal User Agreement and 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(s)," the update warned.

The document was marked as "Last Updated on November 3, 2022" which suggests that the policy was expected to go into effect in just under a month.

The alarm over the new outrageous policy was first raised by Lightspark CEO and former PayPal president David Marcus, who said that the company’s new AUP went against everything he believed in. “A private company now gets to decide to take your money if you say something they disagree with. Insanity,” he tweeted.

Elon Musk, Tesla CEO and former PayPal co-founder, responded to Markus’ tweet with “Agreed.”

As the outcry mounted, PayPal made a sloppy attempt to rescue the situation. The company blamed the publication of an update on an “error” and assured users that it has no plans to implement such a policy.

"An AUP notice recently went out in error that included incorrect information," the spokesperson told FOX Business. "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," the spokesperson added.