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Finance giant PayPal should not be allowed to operate in the UK unless it commits to free speech and transparency over account closures, a parents’ group shut out from its services has said.
PayPal, the multi-billion-pound online payments service, is currently operating under a temporary licence but hopes to be granted full permission to operate in Britain permanently by the end of the year.
The service was previously allowed to operate in the UK under an agreement throughout Europe, but since Brexit has been on temporary licence.
Embroiled in debanking scandal
It has until December to get approval from the Financial Conduct Authority (FCA) for a full licence but has become embroiled in the debanking scandal after several groups claimed their accounts were shut suddenly.
The US payments company was last year accused of shutting down accounts for political motives after temporarily closing the accounts of UsForThem, the parents’ group that fought to keep schools open during the pandemic, as well as the Free Speech Union and its founder Toby Young without any clear explanation.
It later reinstated the accounts following a backlash from MPs.
Other groups that had their accounts shut down by PayPal last year included Left Lockdown Sceptics, which describes itself as a “socialist collective” opposed to government lockdown measures.
However, as customers ask banks for internal communications about their accounts using “subject access requests”, PayPal has now been accused of failing to meet its legal requirements to hand over information on customers.
‘Refusing to comply’
Ben Kingsley, head of legal affairs at UsForThem, said that PayPal had not provided information the campaign group had requested on its account closure and demanded the FCA intervene.
He said PayPal was “refusing to comply with its legal obligations under UK and European law to disclose the information it holds which explains why it debanked UsForThem in September 2022”.
Mr Kingsley said the provider “brazenly continues to ask the FCA to grant it a permanent licence” and said the regulator should demand that PayPal “justify its apparent breach of UK law and regulatory standards, and to suspend its licensing application in the meantime”.
He added: “The FCA must ensure that the only international financial businesses permitted to operate in the UK are those which commit to comply with applicable UK law and regulatory standards.
“This applies especially when businesses are as ubiquitous and influential as PayPal. The UK regulator should not allow itself to be steamrolled into granting a permanent licence to an organisation which has revealed itself to be disinterested in UK law and regulatory standards.”
‘Protect free speech’
Danny Kruger, MP for Devizes, who raised the issue of the Free Speech Union’s PayPal account in Parliament, said the FCA must insist that PayPal protect free speech before granting the company a full licence.
“PayPal operates in a regulated environment and that regulation should include a commitment to free speech,” he said. “I expect the FCA before granting PayPal a full licence to operate in the UK, to insist they make an explicit undertaking not to police their account holders’ political views.”
Toby Young, from the Free Speech Union, said: “If PayPal’s licence to operate in the UK is renewed I think at the very least they should agree to abide by the same rules as other payment services providers operating under licence in the UK and not debank customers because they disapprove of their political views provided they’re perfectly lawful.”
A spokesman for PayPal said: “Due to our legal and data protection obligations, we cannot comment on individual PayPal customer accounts. However, PayPal is deeply committed to its compliance obligations including the fulfilment of subject access requests. In the UK, we respond to lawful requests in line with the deadlines set out by the Information Commissioner’s Office.
“PayPal is dedicated to providing financial services to people of all backgrounds with a diversity of views, and we are committed to freedom of speech.”
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