PayPal could be slapped with a fine of up to 10% of its revenue. Credit: CopyrightFreePictures from Pixabay.

Poland’s Office of Competition and Consumer Protection (UOKiK) has commenced proceedings against payments giant PayPal over the possible use of banned contractual norms in standard contracts that are used for consumers.

If proven guilty, PayPal could be slapped with a fine of up to 10% of its revenue.

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UOKiK is suspicious about the payments company’s authority to levy various contractual fines, including freezing access to accounts, monetary sanctions, or ending contracts, among others.

It also noted that the banned provisions that could attract fines were mentioned vaguely.

Users of PayPal may not comprehend the permitted activities and the penalties that the company could impose in case of violations.

In addition, the terms related to the course of action taken by the company in the event of closure or suspension of an account were not clear.

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However, the contract shows that account holders could invite penalty if they try to use such an account.

UOKiK president Tomasz Chróstny said: “Contracts, and especially those parts of them that define the negative consequences of prohibited actions, must be phrased in a simple and understandable, but at the same time precise language and be based on clearly defined criteria.

“Consumers should be able to anticipate the consequences of their actions while feeling assurance regarding the safety and ability to use their financial resources.

“Accordingly, it is inadmissible for the Company to indemnify itself from any liability while freely imposing such severe sanctions as, for example, blocking funds or closing the account.”

The latest development comes shortly after PayPal introduced passkeys to provide safe login for its account holders.