Venmo’s Collections Policy Is Under Investigation
The Consumer Finance Protection Bureau is on the case
When exactly did Venmo become ubiquitous? Over the course of the last few years, the application has emerged as an easy way to do everything from splitting the cost of a meal to donating to a mutual aid group. It doesn’t hurt that the company’s ownership has a lot invested in that ubiquity, either.
But for all of its convenience, some of Venmo’s users have encountered snags in the process. A Wall Street Journal article from 2020 chronicled the lives of people who’d been the victims of scams using the service — but still faced collections actions from the company. Now, Venmo’s approach to collections has sparked an investigation from the Consumer Finance Protection Bureau.
A new report at The Verge offers more details on the investigation. A regulatory filing revealed that PayPal — which owns Venmo — was subpoenaed by the CFPB in January. According to an email that The Verge received from PayPal, PayPal is cooperating with the investigation and providing information as requested.
The regulatory filing alludes to “Venmo’s unauthorized funds transfers and collections processes, and related matters.” As The Verge notes in their article, collections efforts come into play when a user’s bank account doesn’t have enough money to cover a transaction. Whether the CFPB’s investigation has to do with the victims of scammers dealing with collections actions, or something entirely different, remains to be seen. Given how widely used Venmo is, however, this investigation could have ramifications down the line.
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