PayPal’s recently updated policy states that any false or inaccurate information is subject to a $2,500 fine taken directly from users’ accounts, which is concerning due to its vagueness and illegal seizing of personal funds.

The new policy needs to have clear language on taking funds when dealing with users’ property.

The company has become a commonly used payment system with 421 million users in 2021, according to Business of Apps.

“In connection with your use of our websites, your PayPal account, the PayPal services or in the course of your interactions with PayPal, other PayPal customers or third parties, you will not … provide false, inaccurate or misleading information,” Paypal’s agreement states.

Having $2,500 taken on account of false information was not something 421 million users originally signed up for.

David Marcus, the previous president of PayPal, shared his concerns over the company’s new stance.

It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity. https://t.co/Gzf8faChUb

— David Marcus ⚡ (@davidmarcus) October 8, 2022

Marcus does not agree that a company should have the ability to take money from users on account of misinformation, especially since what constitutes inaccurate information is vague.

Without clear language, PayPal could experience major legal issues, according to USF law professor Jay Wolfson.

“Attaching funds that are not the property of PayPal could constitute mis-appropriation without due process, if not theft,” Wolfson stated in a Nov. 16 interview with The Oracle.

“They can’t just take the money if and when they want from a member. [They] could try, but they would be in deep litigation waters very quickly.”

The legal waters could become even more unsteady when PayPal’s terms are put to the test in court. Misinformation, when punishable by law, would need to be very carefully and clearly defined, according to Wolfson.

PayPal revoked the word “misinformation” from its policy due to backlash, according to a Oct. 27 Forbes article. The company did, however, leave the words “false, misleading or inaccurate information” on the policy.

Removing “misinformation” is defined as false, incorrect or inaccurate information, according to Merriam Webster.

Redacting the word “misinformation” due to backlash does nothing to resolve the issues, especially when remaining words on the policy mean the same thing.

“Third parties” is another concerning word in PayPal’s policy. One Twitter user questioned whether PayPal is tracking misinformation through social media, as those outlets have also adopted PayPal as a way to transfer funds, such as Facebook.

How does Paypal know that you are spreading misinformation? What are they watching our social media accounts? I don't get it.

— Marcella (@marcykey50) October 8, 2022

The connection between Facebook and PayPal has led people to believe it is one of PayPal’s third parties. Leading people to believe that one way PayPal checks for user misinformation is through social media.

PayPal checking social media for misinformation especially becomes a problem since those platforms are used as a way of free speech. Although, this has yet to be clarified.

Having rules and guidelines for members to follow is not necessarily a bad thing for a company to do. It only becomes a problem when a company can seize personal funds on a dime.

PayPal should not be able to take money from users and needs to have a clear definition of what stipulates “false, inaccurate or misleading information.” Without a clear definition, users are at a big risk.