The Federal Trade Commission has reached a settlement with Venmo, a PayPal company, regarding allegations that the company misrepresented the way it handled and made available funds as well as the level of security of its financial platform.
The charges, originally filed in 2015, alleged that some Venmo customers suffered "real harm" when the company either didn't make funds available in the advertised time or withdrew funds after their initial deposit.
Venmo advertised "bank-grade security" and transaction privacy for their customers; the FTC found that the company had delivered neither. In the proposed settlement, Venmo admits to no wrongdoing, but does admit to the facts of the allegations.
Under the agreement, approved by a 2-0 vote of the commission, Venmo is required to stop mis-representing the level of security available for transactions and to be more transparent with customers about both the security and privacy of their transactions. In addition, because of the GLB component of the complaint and settlement, Venmo will have to submit to twice-annual audits of its compliance for 10 years.
The proposed agreement will be published to the Federal Register and become subject to public comment for 30 days. After that time, the commission will vote on whether or not the settlement will become final.
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