PayPal Credit Promotional Payment Allocation

MrsDixon18
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Contributor

PayPal Credit is using fraudulent deceptive practices when allocating payments towards promotional purchases. In 2015 CFPB ordered them to pay 25 million to its consumers for their shady practices. It’s 2018 and not much has changed. I have 24 month promotions and I have 6 month promotions. I make my minimum payment towards my 24 month promotions. And I payoff my 6 month promotions way before the end date. Most within a month of the purchase date. BUT PayPal Credit has this deceptive payment hierarchy where they allocate your payments so they benefit from accrued interest. So even when you make the minimum monthly payment and make extra payments to pay off your 6 month promotions, PayPal is not applying your extra payments towards the 6 month promotions. You have to call and ask to have your payments allocated towards the promotions or you’ll get stuck paying what I call the “stupid tax” 19.99% interest from the date of purchase. They bank on consumers lack of knowledge. They never communicate this in writing. They only tell you this when you call and complain. Extremely fraudulent deceptive practices. Shame on PayPal.

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102 REPLIES 102

jgatl
Contributor
Contributor
Completely agree. My hope is that anyone searching for help can find this post and that it gives them the process to deal with a broken system.
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jgatl
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Contributor
Totally agree with you. Just trying to help those that are in the middle of it right now.
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bennster
Member
Member

2020 in the UK and I too have just come across this DISASTROUS customer service.

I paid the first instalment on a 12 month interest free credit offer, then tried to make a payment against a shorter 4 month interest free deal and found that this payment was allocated to the 12 month deal - leaving me no way to pay off the 4 month deal unless I now clear the whole of the 12 month deal first.....

This is a scam as far as I'm concerned and needs another legal hammering

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Temp20210715c
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Contributor

I have the same issue 21 months left on a 24 month credit but 4 monthly ends next month and all my extra payments have been applied to longest term items .... so undoubtedly i will not clear the 4 month before the interest free period meaning i will have to pay interest  !!   I was told thay can not re allocate payments now ..... so this will be an ongoing issue . I also have a 4month purchase that was refunded ... this has been credited to 24month item meaning I still have to pay that amount within the 4 months ..... really is a case of buyer beware ...... I was told today its a new rule/ law so that customers are not paying high interest .... because payments are allocated to items with highest interest first rather than items ending soonest ... never had this before .

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jgatl
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Contributor

That sucks Dionne. With 3 months left, I'd ask to reallocate any payments you can. I would not take "we can't reallocate payments as an acceptable answer." They could say, we cannot allocate any payments before we took the accounts over from Comerica (June 2019?). I believe they will reallocate for the past 90 days but I would push for more. That will take about 2 weeks to resolve. Make sure you call in to make your next payment, so you can specify how you want it allocated.

 

One last budgeting trick you can use is to see if you can possibly pay 2x a month (or every other week) so it's not as large of a bite out of your paycheck. The advantage here is once you've met your minimum payment, the second payment can be completely allocated to whatever balance you choose. For example, you get paid on 1st and 15th and your statement ends on 15th, and the minimum payment is $128 ($100 easy pay, $28 to promotional balances expires on April 15):

Jan 1 -- paid $128 -- $100 to easy pay plan, $28 to next expiring balance

Jan 15 -- paid $75+ -- $75 will go to easy pay UNLESS you call in and direct it

Feb 1 -- paid $128 -- same as above

Feb 15 -- paid $75+ -- call in again, this is still not 60 days from expiration of Apr 15

Mar 1 -- paid $128+ -- now anything over $100 easy pay min payment should go to expiring balance

Mar 15 -- paid $75+ -- should be automatically applied to Apr 15 balance, check the portal online on Mar 17 to confirm

Apr 1 -- paid $128+ -- same as Mar 1

Apr 15 -- paid $75+ -- same as above

 

Good luck and reply back if the forum can be of any help.

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Temp20210715c
Contributor
Contributor
Thanks for the advice, but I was told they cant re allocate nor can they allocate to a specific item / offer even if I call up . I made minimum payments and then additional as u suggested already.... all applied to longest term because it has the highest interest.... apparently that's the rule. I'm going to contact citizens advice but I think it is probably in the small print and no way around.... lesson learned unfortunately. Thanks for all the info tho 🙂
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chris-j
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Contributor

The law in the uk is that companies must apply payments to minimise interest. In the case of 24 months int free and 4 month interest free, allocations should be made to the 4 month first because the 24 month item does not incur interesr until month 24 while the 4 month item incurs interest sooner therefore should have first payment allocations. 

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jgatl
Contributor
Contributor

Dionne

Do not take no for an answer. If you were refunded for a 4 month payment, PayPal Credit can reallocate this payment for you to the correct balance (or in fact, to any balance). When you call PayPal Credit, ask for a supervisor. If the CSR pushes back, tell them a previous supervisor told to ask for a supervisor because you were having trouble getting payments allocated correctly.  

 

One other note. When any promotion is expiring within 60 days (really 2 billing cycles), PayPal Credit will automatically allocate anything above the minimum payment to that expiring promotion. If you have easy payments (24 month), they are built into the minimum, plus $28 for any other (3, 4, or 6 month) promotions. If you are outside the 2 billing cycle window, you should first make the minimum payment. You then must call in to make a phone payment specifically allocated to your promotional balance. 

 

I highly recommend creating a spreadsheet of your balances. I've mocked up a quick example here. Red shaded cells indicate when the promotional balance either expires or is due to be paid off (easy pay). Note that any payment made on a balance expiring in more than 3 months will go to Easy Pay, so you will need to call in for those. I've highlighted those in red text. Finally, remember that your minimum balance will include $28.00 toward promotional balances, so your additional payment amount should exclude the $28.00. Hope this helps. 

 

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tillkrueger
Contributor
Contributor

What PayPal Credit, or should I say Synchrony Bank which took over PayPal, is doing, is predatory at best and feels illegal, to say the least.
I have posted here months ago about this situation, but it has gotten worse, rather than better, since.

 

They have resorted to a practice of applying payments to promotions in such a way that it's all but impossible to avoid interest if there is a mixture of so-called 12/24-month Easy-Pay promotions and 6-month promotions.

 

In 25 years of being a PayPal customer, I have never seen anything as ludicrous as what has taken place over the course of the time since Synchrony took over. Instead of being able to just pay off a 6-month promotion, one has to call in and request that a mysterious "backend team" re-allocate the payment in such a way that the payment actually pays off that promotion which is due the soonest and accrues interest if not paid in full by a certain date. For this manual labor, the backend team needs "about" 1 or 2 billing cycles "usually", which - at least for me -  has "usually" not worked, requiring another phone call which then resets the clock and results in you being told that the request will be re-submitted and will take "about" 1 or 2 billing cycles. Rinse, repeat.

 

I have wasted countless hours this past year calling PayPal Credit, always being told the same lies, and am at a total loss to understand how a bank can get away with scamming their customers like this.

 

Just now I got out of a 2-hour session with PPC (the first two attempts got disconnected after 20mins on the phone with two separate staffers, always a call center) and followed by a "supervisor" (also a call center) who was chewing gum and used the word "like" between every quarte sentence...I could kick myself for not having recorded this phone call, as it illustrated the audacity of what is happening like no other call before...part of it went something like this (remember, this is a "supervisor" called Katelyn, chewing gum like a young teenager):

 

"...see, like, the way this works is, like, you ask us to apply it a certain way, and we, like, I mean our backend team, like, then asks for it to be allocated, and if, like, everything goes right, it, like, gets applied within 1 or 2 billing cycles, but we are aware that something, like, happened during the transfer to Synchrony, and we have, like, tried to fix it since I don't even know when exactly, but it, like, still isn't working right, so we're, like, really sorry for the inconvenience, but there isn't really anything else that we can do."

 

I mean, what does one say after that?!

 

After 6 months of useless phone calls with a 180 pulse from shock and awe, I finally gave up just now and asked to let me pay off my entire set of promotions at once, plonking down almost $3,000 that I don't really have, but felt like I have to pay like a ransome, just to be able to live my life again like I am not being held hostage by a predatory bank. I seriously doubt that this will be the end of it, bc why wouldn't they find a way to somehow misallocate this payment, but hope always dies last.

 

PayPal Credit, aka Synchrony Bank, shame, shame, shame on you.

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truthseeker1000
Contributor
Contributor

I just got off the phone with them (Paypal) and after some explaining got the allocation straightened out (hopefully) I won't know till the next billing cycle. I insisted and received a reference number re the conversation. My suggestion is to make your payments by phone so you can demand allocation you desire. I shall be doing this in the future

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