Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive or abusive practices.

Since 2008, PayPal has offered PayPal Credit to consumers across the country who make purchases from thousands of online merchants, including eBay. The CFPB alleged that many consumers who were attempting to enroll in a regular PayPal account or make an online purchase were signed up for the credit product without their knowledge. The company also failed to post payments properly, lost payment checks and mishandled billing disputes that consumers brought against merchants or PayPal, according to the CFPB.

Specifically, the CFPB has alleged that PayPal deceptively advertised promotional benefits; abusively charged consumers deferred interest; enrolled consumers in PayPal Credit without their knowledge or consent; made consumers use PayPal Credit for purchases instead of their preferred payment method; engaged in illegal billing practices and mishandled consumer disputes about payments.

“PayPal Credit takes consumer protection very seriously,” PayPal said in a statement. “We continually improve our products and enhance our communications to ensure a superior customer experience. Our focus is on ease of use, clarity and providing high-quality products that are useful to consumers and are in compliance with applicable laws. ”

The settlement, which was submitted in a U.S. court in Maryland, will require judicial approval before it takes effect. The CFPB noted that the order “is not a finding or ruling that the company has actually violated the law.”