Users of PayPal could be fined $2,500 (roughly £2,261.24) for spreading misinformation.
PayPal had planned to introduce the new policy on November 3, according to several reports. As a result Google searches for the phrase "delete PayPal" have skyrocketed by 1,392% as users scramble to get rid of their accounts and shares in the company fell nearly 6% after the update , reported The Mirror.
The announcement came as part of a new policy set to come into force next month, but PayPal has since done a U-turn following the backlash. A spokesperson for the company stated: “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy.”
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Analysis by Financial World found that worldwide Google searches for the phrase "delete PayPal" and "cancel PayPal" saw massive spikes following the news. A spokesperson for Financial World commented on the findings: “PayPal has received backlash from their announcement, which was quickly retracted.
“Many posts can be seen highlighting the issue that PayPal announced they could deduct $2,500 straight from your account for misinformation, with hundreds of people suggesting closing their accounts to avoid this penalty. Famous faces, including Elon Musk, have been in agreement that the new policy is misguided.”
While the spike in Google searches meant PayPal users were keen to cease using the service altogether, some people took to social media to voice their criticism of the new policy. Paypal's former president David Marcus took to Twitter to criticise the policy.
He said: "It’s hard for me to openly criticize a company I used to love and gave so much to. But PayPal ’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity."
While billionaire Elon Musk - who was a co-founder of PayPal before selling his shares to eBay for $175.8 million in 2002 - said he 'agreed' with Mr Marcus. As a result of the widespread backlash that came with the announcement, Paypal's shares fell by more than 6%.
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