12 May 2022, Saxony, Dresden: A woman holds a smartphone with the logo of the payment service Paypal. Photo: Sebastian Kahnert/dpa
PayPal’s Australian arm used an unfair term in the standard contracts it offered small business users, according to a Federal Court ruling.
On Thursday, Justice Mark Moshinsky found PayPal used a contract term that unfairly allowed it to retain fees falsely charged to small business users, if those users did not alert PayPal of the erroneous charges within 60 days.
The term affected small businesses that opened a PayPal account from September 21, 2021, to November 7, 2023, according to the Australian Securities and Investments Commission (ASIC).
ASIC launched legal action against the payment giant on September 6, 2023, which led to PayPal voluntarily removing the term from its contracts on November 8 that year.
In a statement on the ruling, ASIC said Justice Moshinsky found small businesses that were subject to the term were not able to effectively manage the threat of PayPal fees being overcharging.
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