Australia: Filed ASIC public lawsuit against PayPal for allegedly using unfair contract terms with small businesses

On 7 September 2023, the Australian Securities and Investments Commission (ASIC) filed a public lawsuit against PayPal for allegedly using an unfair contract term with small businesses. In particular, ASIC has initiated legal proceedings against PayPal Australia Pty Limited (PayPal), alleging that its standard form contracts with small business customers include an unfair term. This term gives PayPal business account holders only 60 days to report any fee errors, after which the fees are accepted as accurate. ASIC claims the term is unfair as it allows PayPal to retain wrongly charged fees if not notified within this period, placing an undue burden on small businesses to detect and report errors.