PayPal
Flagged · AvoidDiverted creators' affiliate commissions through its Honey extension, froze accounts for months while keeping customers' money, and threatened $2,500 fines over vaguely defined misinformation.
Last updated September 4, 2026
Reasons to avoid
Issues span:ConsumerPrivacy
Hijacked creators' affiliate commissions at checkout
PayPal's Honey browser extension was documented replacing content creators' affiliate tracking links with its own moments before checkout, diverting commissions that would otherwise go to the creator who drove the sale. Multiple class action lawsuits followed, including one from YouTube creator Devin Stone accusing PayPal of systematically diverting affiliate earnings.Breach exposed 35,000 users' sensitive data
A December 2022 data breach exposed the names, Social Security numbers, and tax ID numbers of nearly 35,000 PayPal users due to what a class action lawsuit called inadequate security practices. The suit accused PayPal of failing to follow basic data protection standards, leaving victims exposed to identity theft.Threatened $2,500 fines for misleading content
PayPal quietly updated its policy in October 2022 to allow fines of up to $2,500 for user content the company decided, at its sole discretion, promoted misinformation. After intense public backlash PayPal called the change an error and dropped the word misinformation, but the underlying $2,500 fine for vaguely defined misleading content remained in its terms.Froze accounts, kept funds without explanation
PayPal has frozen customer accounts for up to 180 days without explanation and in some cases permanently kept the funds, according to a federal lawsuit filed by affected users. One plaintiff, a 22-year PayPal customer, said the company took $26,984 from her account six months after freezing it without ever telling her why.
Ethical alternatives
Send Money to Friends & Family
Business & Merchant Payments
Savings & Banking
Local Credit Unions
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Climate First Bank
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Beneficial State Bank
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Visit →Common questions
- Is PayPal ethical?
- PayPal's Honey browser extension was documented replacing content creators' affiliate tracking links with its own at checkout, diverting commissions from the creators who drove the sale. PayPal has also frozen customer accounts for up to 180 days without explanation, with one 22-year customer losing $26,984 from her account without ever being told why.
- Why should I avoid PayPal?
- A December 2022 data breach compromised the personal information of nearly 35,000 PayPal users, leading to a class action alleging the company failed to adequately protect customer data. PayPal also quietly attempted to add a policy allowing it to fine users up to $2,500 for content it deemed misinformation, reversing course only after major public backlash.
- What are the best ethical alternatives to PayPal?
- Wise offers transparent mid-market exchange rates for sending money, especially across borders. For business and merchant payments, Stripe and Helcim both offer transparent pricing with no monthly fees. Apple Pay is a free option for person-to-person payments between Apple users.
Know of a documented reason we're missing?