The President of the Polish competition authority has issued two binding decisions against PayPal, addressing unfair practices related to contract modifications and improper notification of fee changes. PayPal has agreed to stop these practices and refund users for fees charged under the contested terms.

PayPal, a leading online payment service, was found to have used a modification clause in its agreements with Polish users that allowed the company to unilaterally introduce new fees and increase existing ones. Customers had complained about a fee introduced in 2020 for inactivity.

The authority deemed the modification clause, which stated that PayPal could change the agreement at any time, as abusive. It also criticized the way changes were communicated, which could violate users' rights by failing to provide information on a durable medium, as required by law.

According to the authority, a durable medium must ensure that the information cannot be altered by the provider and must be accessible to consumers even after the contract ends. Examples of durable media include paper documents, USB drives, and email attachments, while hyperlinks to websites do not meet this requirement.

To implement changes in indefinite contracts, a precise modification clause is necessary, clearly outlining the circumstances under which changes can occur. The authority emphasized that consumers should not be surprised by changes that lead to higher costs, especially in payment services where fees are a critical factor in transactions.

As part of the settlement, PayPal will no longer use the contested modification clause and will reverse changes made since January 1, 2019, including new inactivity fees and increased currency conversion charges. Polish users will receive a refund of 150% of the fees charged during the period the contested terms were in effect.

Current PayPal account holders will receive their refunds automatically within 10 months of the decision becoming final, without needing to take any action. Former users will also be contacted regarding their refunds within the same timeframe. Additionally, consumers will benefit from a temporary reduction in currency exchange rates.

The decisions are not yet final and can be appealed in court. This is not the first time the Polish competition authority has acted against PayPal, as the company was previously fined nearly 106.7 million PLN for using prohibited clauses.

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