PayPal Credit Promotional Payment Allocation

MrsDixon18
Contributor
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
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I believe this whole issue stems from a synchrony system limitation. I used to have multiple expiring balances and payments down to a science and now I have to call every month to allocate my payments. It's such a problem that it takes about 2 weeks to get an allocation done. Easy pay used to work perfectly, it would take the amount, split it over 24 months and automatically allocate your payment across each balance. Everything else went to the next non-easy pay balance that expired. 

 

I did talk to a customer service rep, who explained any payment above the minimum now goes to the easy pay plans first. This can really **bleep** you up, because something that is due in 7 months will be paid before a balance expiring in 2 months. I'm testing a minimum payment (to see how this allocates across my 3 easy pay balances) and then one more payment after that point. I hope that some combination of multi-payments will at least simplify the allocation (take the $100.00 payment and allocate it to the balance from 3/1/2018).

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jgatl
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Results from minimum payment. Easy pay is any balance where the amount is spread evenly across 24 months. For illustration purposes, I paid $200 on the minimum. The payment allocated perfectly to two of my three easy pay balances (e.g., $100 and $75, leaving $25 to allocate). The third easy pay balance, which should be $20/month, now states $0 is due per month due to the overpayment from last month (which brought it down to $50 remaining). Therefore the remaining portion ($25) went to the next expiring 6 month balance. I am paying the second (over) payment today, but I expect it will go against the next two expiring balances (since this second payment will pay off one 6 month balance). This is actually working the way I want, because it will ensure I can pay off the 6 month balances before they expire (which would be before the next easy pay expires). I'll report back on the results from that second payment tomorrow.

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jgatl
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Overpayment applied completely to easy pay plan expiring next (in March 2019) vs. next expiring balance (expires Nov 2018). Looks like I'll have to call in each month to reallocate payments. Next month I will test one payment (with an overpayment above the minimum payment) to see if the zero owed easy pay balance is skipped or if the overpayment applies to it.  I don't believe there's any workaround other than calling PayPal Credit to have payments reallocated.

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jayceebee23
New Community Member

This is simply ridiculous! I too have multiple deferred payments expiring in 3 months. I created this worksheet that calculates my total monthly payment based on the remaining balances of each deferred purchases and remaining months to expiration. This has worked out for me so far. However, it fell apart when I have recently purchased a big item in ebay using a paypal promo of 0% 24-month easy payment plan. It seems that all of my payments are now applied to the 24-month easy payment plan and the remaining balances on these soon-to-expire deferred purchases remain unchanged. Based on what I have read on Paypal's site, these deferred payment purchases will only be considered if they are expiring on the next billing cycle which defeats the purpose of staggered payment. I'm somewhat glad one can call to request payment reallocation but what seems straightforward before is now a monthly ongoing pain. I'm planning on calling and hope it's not like pulling teeth!

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jgatl
Contributor
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@jayceebee23 I'm doing the same thing with a spreadsheet. The important thing when calling in is to tell them how to allocate your payment, and don't worry about how the payment was allocated. The CSR will ignore what happened when you call in.  These bullets below will help you spend as little time on the phone as possible:

  • Pay at least 2 weeks early so the allocations happen prior to the statement close date. My transfer for August took about 2 weeks for the transfer to complete. My September allocation was filed on 9/1 and completed on 9/12; the last workcase on 8/16 was completed on 8/29)
  • For each balance, have the initial purchase date, purchase amount and purchase expiration date. I would also have the company name (seller) for the  item purchased (all of this should be listed on your statement).
  • Tell them the dollar amount you want allocated to each balance. Don't use the word transfer. For example, if you made a $205.00 payment, you want to allocate $35.00 to the 24 month payment plan of $700.00 made on 1/12/2018, $70.00 allocated to the 6 month purchase of $105.00 made on 8/15/2018 and the remaining $100.00 allocated to the 6 month purchase of $250.00 made on 5/11/2018
  • Completely allocate the payment. If you don't specify where it goes, the PayPal Credit CSR will ask you what to do with the remaining. In my case, I had 2 easy payment plans that specified a payment amount, and I restated those amounts in the allocation (e.g., allocated $31.25 to the easy payment plan of $750 ending on 5/12/2020 and $50.00 to the easy payment plan of $1,200 ending on 8/11/2019
  • Make sure your payment matches or exceeds the minimum amount. Otherwise they won't let you request the allocation
  • Ask them to tell you the remaining balance for each allocated portion of the payment after each request. This will allow you to match this up correctly
  • When you get an email stating the (allocation) work case is closed, wait another day before double checking the balances

I'm now working a 2 week cycle.  Pay 2 weeks early, check the balances a day later, call to allocate the payment, wait 2 weeks, check the transfer against your spreadsheet (rework balances for next payment) and restart the cycle. My last 2 allocations took 11 days and 12 days, so it appears a 14 day cycle gives you enough room for delays.    

 

Finally, I would urge all PayPal credit users with multiple balances (particularly these with easy payment plans) to pay any 6 month expiring balance a full month ahead of schedule, and increase your payments to the easy pay balances once those are paid off. If there's a problem, you have 30 days to reallocate your payment to the next expiring balance without getting hit with interest. My guess (which I'll know in a few months) is that once the 6 month balances are gone, the 24 month easy pay balances will apply payments correctly.

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jgatl
Contributor
Contributor

Single payment results. I have 3 easypay (24 month) balances, the two that don't expire in the next 6 months and another that expires in 3 months. To illustrate this, the amount I paid was $300 and the minimum due was $200. The 2 non-expiring easy pay plan payment amounts are $70 and $110. These 2 plans paid as expected ($70 and $110, or $180). The over-payment of $120 was split with $100 going to the expiring easy pay plan ($300 payment - $200 min). The remaining "unapplied" payment amount  ($20) went to the next expiring 6 month same as cash balance.

 

So the rules appear to be:

  1. Listed easy payment amounts on your statement will be applied correctly ($70 and $110)
  2. On a single overpayment, the difference between the sum of the listed easy pay amounts ($180) and the minimum payment listed on the prior month's statement ($200) will go to the next expiring 6 month same as cash ($20)
  3. The difference between the payment and the minimum payment amount ($300 - $200 or $100) will go to the next expiring easy payment balance
  4. You can only allocate the difference between the minimum payment and your payment ($100). The other $200 cannot be allocated 
  5. The allocation erases what happened with the overpayment. In the example above, the $20 applied to the 6 month balance is removed and replaced with the $100 reallocation request. It's likely that $20 will remain on the next expiring easy payment plan ($200 - $180 = $20). 
  6. Call to reallocate your payment if you have a 6 month expiring balance that expires before the next expiring easy pay balance

I don't know what occurs when you have 6 month same as cash balances expiring at the same time as an easy payment plan. My balances are staggered such that the six month balances expire before (or after) the next easy payment plan. Good news is that I was quoted a 2 day turnaround on my allocation request.

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jgatl
Contributor
Contributor

One change to the prior post (quoted below). The $20 difference between the minimum payment amount and easy payment amounts will be applied to the next expiring 6 month same as cash plan. I've modified the text in red to match what happens:

@jgatl wrote:

Single payment results. I have 3 easypay (24 month) balances, the two that don't expire in the next 6 months and another that expires in 3 months. To illustrate this, the amount I paid was $300 and the minimum due was $200. The 2 non-expiring easy pay plan payment amounts are $70 and $110. These 2 plans paid as expected ($70 and $110, or $180). The over-payment of $120 was split with $100 going to the expiring easy pay plan ($300 payment - $200 min) and the remaining "unapplied" minimum payment amount ($20) goes to the next expiring 6 month same as cash balance.

 

So the rules appear to be:

  1. Listed easy payment amounts on your statement will be applied correctly ($70 and $110)
  2. On a single overpayment, the difference between the sum of the listed easy pay amounts ($180) and the minimum payment listed on the prior month's statement ($200) will go to the next expiring 6 month same as cash ($20)
  3. The difference between the payment and the minimum payment amount ($300 - $200 or $100) will go to the next expiring easy payment balance
  4. You can only allocate the difference between the minimum payment and your payment ($100). The other $200 cannot be allocated 
  5. The allocation erases what happened with the overpayment. In the example above, the $100 applied to the next expiring easy pay balance is available to move with your reallocation request.The $20 remains on the next expiring 6 month same as cash plan ($200 - $180 = $20). 
  6. Call to reallocate your payment if you have a 6 month expiring balance that expires before the next expiring easy pay balance

I don't know what occurs when you have 6 month same as cash balances expiring at the same time as an easy payment plan. My balances are staggered such that the six month balances expire before (or after) the next easy payment plan. Good news is that I was quoted a 2 day turnaround on my allocation request.


 

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orge124
New Community Member
I usually have to call to allocate payments making this a kind of difficult task. Some of their staff don't even know what I am trying to do. I checked my transactions and some of my payments went towards newer transactions when it should of gone to the ones that will expire sooner. I smell another lawsuit pretty soon. BofA pulled something similar like this back in the 2006s and they lost.
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dicentra01
Contributor
Contributor

Totally deceptive.  I tried to explain to the Paypal customer service guy that I wanted to allocate my payment to the one that would hit me up with a charge for not making a minimum payment and I couldn't do it.  I had to pay off my first promotion which I only owed 25 dollars on and had until next month to pay it off before I could make the minimum payment on the second promotion.  What a scam.. I won't use this service again.  I'm not stupid...I know where I want my money to go.  Why does paypal credit get to tell me where its going to go and then get to charge me for doing it their way??  Shady...

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jgatl
Contributor
Contributor

I spoke with a CS rep today and he pointed me to the following help text that explains how the minimum payment works. He explained is that the minimum payments for purchases after July 2018 will fall into 2 categories. The first category is 6 month interest free ($27.00 minimum regardless of whether you have just one or multiple balances). The second category is easy payments, which should be a set amount per month ($240 purchase, $10 per month for 24 months). In this example, your minimum payment would be $37 ($10 + $27).

 

The other thing the CSR told me was that the $27 minimum will be applied to any interest free balance that expires in the next 2 billing cycles. This won't count your current billing cycle. If we use today (10/26), we're in November billing cycle (the November statement hasn't been issued yet). Since I have a balance expiring in January 2019, the $27.00 will go to that balance (count 2 cycles, December and January).  Any excess payment above the minimum will be applied to the next expiring easy pay balance (as outlined in the help text above). Although the help text states that your excess payments will go to the 2 billing cycle expiring deferred interest balances, that didn't happen for me.  I'll see what next month brings in terms of payments.

 

I was quoted a 3 day turnaround on the allocation.

 

 

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