• The President of UOKiK issued two binding decisions against PayPal.
• The practices in question concerned changes to the agreement based on an unfair modification clause and incorrect notification of changes to fees.
• The company has undertaken to discontinue them and to reimburse the fees associated with their use, together with compensation.

PayPal is one of the largest and longest-operating online payment services. A PayPal account is a type of electronic wallet integrated with a bank account to which a payment card can be assigned. During the proceedings, it was established that PayPal Europe used a modification clause in its agreements with Polish users of the service, on the basis of which it unilaterally introduced new fees and increased existing ones. Customers complained, among other things, about the inactivity fee introduced in 2020.

The President of the Office of Competition and Consumer Protection issued two decisions concerning agreements with Polish users of PayPal services. He found abusive the provision in the standard agreement used by PayPal Europe since 11 December 2019 stating that the company “may from time to time make changes to this Agreement with the User and to other documents”. He also found that the manner in which the changes were communicated could have infringed the interests of PayPal account holders, including the obligation to provide such information on a durable medium.

Why a durable medium?

The ability to download a document from a website or app - which do not meet the characteristics of a durable medium - does not ensure that it is the same version of the file that was originally posted there. In this case, the entrepreneur has the technical ability to freely modify the wording and content of his website. Between sending an e-mail with a link and downloading the document, the file can be changed or deleted. Therefore, the law requires that consumers be provided with relevant information in a medium protected from tampering by the sender. A paper document, a memory card, a flash drive, an e-mail message or an attached file, such as a pdf, can be considered a durable medium. A mere hyperlink redirecting to a website does not meet the requirements of a durable medium.

No modification clause and no higher fees

The correct form of delivering information is not enough. In order for an entrepreneur to amend an agreement for an indefinite period of time, it is also necessary to have an appropriate modification clause, which, in accordance with the regulations, will precisely and unambiguously indicate the specific circumstances conditioning such an amendment.

– Consumers should not be surprised by changes to the agreements. Especially when these changes involve higher costs. In the case of payment services, the fees charged to consumers are one of the key factors determining whether a transaction is carried out. Provisions allowing for changes to the terms of the agreement are permitted, but should be precise. They should enable consumers to predict changes in costs or the scope of services already at the stage of signing the contract. The clause stating that the company “...may from time to time make changes to (...) the agreement” gave the entrepreneur complete freedom and exposed consumers to unpleasant surprises, including those of a financial nature – says Tomasz Chróstny, President of UOKiK.

In accordance with the decision, PayPal will no longer apply the modification clause to consumers, nor will it apply the changes introduced on 1 January 2019, which included new fees for inactivity and for payments to US bank accounts. The same applies to the changes introduced at the same time, which increased currency conversion fees.

Refund and compensation

As part of the agreed compensation, Polish PayPal users will receive a refund of 150% of the fees charged during the period in which the contractual provisions challenged by the President of UOKiK were in force.

Current PayPal account holders will receive a refund and compensation to their accounts within 10 months of the decision of the President of UOKiK becoming final, without having to take any action. Consumers who no longer have a PayPal account will also receive a refund and compensation. The company will contact them about this within 10 months of the decision becoming final. Consumers will additionally benefit from a periodic reduction in the exchange rate.

The decisions are not final. They can be appealed with the court.

This is not the first decision of the President of UOKiK against PayPal Europe – last year, he imposed a fine of nearly PLN 106.7 million on the company for using prohibited clauses.

Worth remembering

Not sure if you have been provided with information on a durable medium? A durable medium (paper, a memory card, flash drive, pdf file) meets the following three criteria:

• no changes can be made,
• direct accessibility to content in a timely manner (even after termination of the agreement),
• seamless reproduction of the content unchanged.

The definitions of a durable medium derive from EU and domestic regulations, including Directive 2015/2366 on payment services in the internal market (PSD2) and the Act on payment services (Journal of Laws 2024, item 30, as amended), which implements the directive.