AUSTIN, Texas (Legal Newsline) — Texas Attorney General Ken
Paxton has announced PayPal Inc. has settled allegations related to the
security of its Venmo mobile application (“app”).
PayPal has owned the app since 2013. The app helps users
transfer money electronically to pay others using linked bank accounts and
“Innovation in payment processing technology benefits consumers
throughout Texas,” Paxton said. “However, it is important that businesses
remain aware of the potential consequences regarding their users’ privacy and
security so that they can better protect consumers.”
According to the attorney general, the state found issues
regarding the safety and security of the app. Venmo allegedly used consumers’
phone contacts without properly disclosing how the contacts would be used.
Additionally, it purportedly did not disclose that consumer interactions could
be shared. Because of these alleged actions, consumers may have publicly
exposed private information regarding payments they made.
PayPal will pay the state of Texas $175,000 and has agreed
to improve disclosures to consumers about private and security. It will better
inform users of safeguards the app provides and ensure consumers understand who
can view information about their transactions.