PayPal's Venmo pressures negative balance account holders

|About: PayPal Holdings, Inc. (PYPL)|By:, SA News Editor

PayPal's (PYPL +0.7%) Venmo digital money-transfer service is increasing pressure on users the company says owe it money for transactions that soured, the Wall Street Journal reports, citing customer-service emails it reviewed.

Venmo is threatening to turn over to debt collectors some cases where users carry negative balances; it also amended its user agreement to get more power in recovering money its customers owe by taking it from their other accounts at PayPal.

Some recipients of the collection threats said the negative balances occurred after their accounts were taken over by fraudsters or they got duped into sending payments to swindlers. Venmo should go after the people responsible for the fraud, they said.

The increased effort to recover payments comes as Venmo struggles to earn a profit. In a January conference call, PayPal CFO John Rainey said that Venmo hasn't yet made a profit and declined to predict when it would break even.

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