The Federal Trade Commission said Tuesday that it reached a settlement with PayPal Holdings Inc. over the commission’s allegations that PayPal misled Venmo users about account transfers. PayPal shares are down 0.6% in Tuesday trading. The commission charged that PayPal told users of its Venmo app that they could transfer money to their bank accounts without properly informing them that funds could be removed or frozen following the company’s review of the transactions. The FTC also said that Venmo “misrepresented the extent to which consumers’ financial accounts were protected by ‘bank grade security systems,'” according to a release. “We are pleased to conclude this process with the FTC in a cooperative way,” PayPal said in a statement. “We’ve taken steps to significantly strengthen our privacy and data security practices. The company will continue to invest heavily in programs designed to create better user understanding and to enhance privacy.” A company spokesperson also said that there was “no associated fine.” The proposed FTC settlement will be available for public comment through March 29 and then the commission will decide whether to finalize it. PayPal shares are up 85% over the past 12 months, while the S&P 500 Index has gained 17%.
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