ASIC sues PayPal over unfair contract terms
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The news: Financial regulator ASIC is suing PayPal Australia over an unfair contract term in its standard form agreements with small business customers.
The numbers: The case involves a contract term that gives PayPal business account holders 60 days to notify PayPal of any errors or discrepancies in fees that PayPal has charged them, or else accept those fees as accurate.
The context: ASIC alleges the term is unfair because it effectively allows the payments giant to retain fees it has overcharged or wrongly charged if the small business does not notify PayPal of the error within 60 days of the fee appearing in its account statement.
It wants declarations that the contract term is void and is also seeking injunctions and corrective orders from the court. The regulator similarly sued Auto & General Insurance Company in April over alleged terms in its standard form home and contents insurance contracts, as well as HCF Life Insurance Company in May for three types of insurance policies that contained alleged unfair contract terms.
What they said: “We allege this term is unfair because it allows PayPal to escape the consequences of its own errors in overcharging small businesses, and places additional burdens on small businesses to detect and correct charging errors,” ASIC Deputy Chair Sarah Court said.
The source: ASIC Statement
