Financial technology company PayPal has announced its commitment to modify its terms and conditions in order to fully comply with the European Union ’s consumer laws. Following a discussion held with the European Commission and the national customer authorities, PayPal committed to modifying its terms and conditions, in order to make them more transparent and easier to understand for its clients and users.

The Consumer Protection Cooperation Network (CPC) (which was coordinated by the European Commission and led by the German authority Umweltbundesamt - German Environment Agency) started this dialogue with PayPal back in May 2023, as the network considered that the firm’s terms and conditions were difficult to understand and overall unfair for clients. PayPal agreed to address this issue and to amend the problematic clauses of its User Agreement, aiming to better comply with the Unfair Contract Terms Directive. At the same time, the commitments made by PayPal are expected to bring the company’s practices in line with the requirements of EU customer laws.

More information on the announcement The Consumer Protection Cooperation Regulation enabled national authorities to use a common toolbox of string powers in order to detect irregularities and take speedy and coordinated action against traders and businesses that do not comply with the requirements. The new Directive that focuses on optimised enforcement and modernisation of Union customer protection rules amended existing EU customer law instruments by improving transparency for clients when they make payments in online marketplaces. Following this announcement, PayPal has agreed to implement a number of changes to its terms and conditions, as well as clarifications to several clauses of its User Agreement for customers.

In particular, the company will focus on clarifying which clauses apply to clients and which apply to businesses only, removing the provisions that require clients to check compliance with the laws (including wording such as `to the expend permitted by law`), as well making it clear that users are not liable for the damage which was not caused by their fault, or that could not have been foreseen. In addition, PayPal will remove the provisions that impose on customers the obligation to verify the information themselves (including the situation stating that the company can’t guarantee the accuracy of the information) and remove terms that can’t be understood by clients without further explanation or without an overall verification or clarification process done by themselves (such as `non-infringement` or `merchantability`). The firm is set to ensure that clients understand that they can benefit from the law of their country of residence in case of a dispute as well.

The changes will be notified to customers and users via a Policy Update on the 21st of February 2024 and are expected to formally take effect on the 28th of May 2024. Throughout this process, the Consumer Protection Cooperation Network (CPC) will actively monitor how PayPal incorporates the commitments in its terms and conditions, as well as how it will enforce compliance where necessary. .