Consumer bureau probing how Venmo handles debt collection
The Consumer Financial Protection Bureau (CFPB) is probing how Venmo is handling debt collection.
PayPal, which owns the money-transfer app, disclosed in a Friday regulatory filing that it received a “Civil Investigative Demand” (CID) from the bureau on Jan. 21 “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.”
The company added that the agency requested documents and answers to written questions.
“We are cooperating with the CFPB in connection with this CID,” the company wrote.
The bureau didn’t immediately return a request for comment from The Hill.
Venmo has come under criticism in recent years over the way it handles customers with negative balances in their accounts.
The Wall Street Journal reported that the company threatened to send debt collectors to users who overdraw their accounts. It has reportedly continued its collection efforts during the coronavirus pandemic.
PayPal said Wednesday that Venmo processed $47 billion in total payment volume in the fourth quarter of 2020, up 60 percent from the same time last year.
For the entire fiscal year of 2020, the digital-payment app processed approximately $159 billion in payment volume.