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UOKiK, the Polish regulator for Competition and Consumer Protection, is reported to have started proceedings against PayPal over possible prohibited contractual provisions, adding that the possible fine could amount to 10% of the company’s revenue.
Polish regulator takes aim at PayPal
The regulator said it has doubts regarding the payments company’s right to impose contractual penalties, such as blocking access to accounts, financial sanctions, or terminating contracts among others.
UOKiK said that prohibited activities which could incur penalties were described in an unclear way and users may not understand exactly what was not allowed and what action the company could take in such cases.
PayPal Inactivity Fee
PayPal customers who have not had any activity in the past 12 months will be charged an inactivity service fee. Inactive accounts without positive balance may also be closed by PayPal after an additional 60 days.
The inactivity fee was introduced in some countries in 2021, and has now been expanded to more countries that PayPal operates in.
PayPal users who have not used the account in the past 12 months are notified by PayPal about this, according to the company. Customers have until December 13, 2022 to become active and avoid the fee.
PayPal will charge the fee automatically, provided that the inactive account has a positive balance.
Accounts with a balance of zero are not impacted by the fee, but they may face closure as well.
The maximum amount that PayPal is going to charge is €10, or the equivalent in another currency. If the account’s balance is positive but less than €10, that amount is charged.
Accounts that remain inactive for another 60 days after the fee has been charged face termination.
PayPal explains that its User Agreement allows it to charge an annual inactivity service fee. The fee is charged “to maintain accounts that are inactive”.
“Agreements, and especially those parts of them that define the negative consequences of prohibited activities, must be written in simple and comprehensible, but at the same time precise language and based on clearly defined criteria,” the head of UOKiK, Tomasz Chrostny, said in a statement.
“PayPal remains deeply committed to its compliance obligations and the company works closely with regulators around the world to adhere to all applicable rules and regulations in the markets in which we operate,” PayPal said in an emailed statement.
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