New York Regulators Fine PayPal $2 Million For Cybersecurity Lapses
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PayPal has agreed to pay $2 million to settle charges in New York State after cybersecurity problems at the company caused customers’ social security numbers to get exposed.
The New York State Department of Financial Services (NYDFS) found that PayPal didn’t hire skilled staff to handle key cybersecurity tasks and didn’t give enough training to handle cyber risks.
Changes To Handle IRS Form 1099-Ks Exposed Sensitive Customer Data
Customer data got exposed after PayPal made changes to how data was handled to let more customers access IRS Form 1099-Ks. But the teams making these changes didn’t know enough about PayPal’s systems and processes.
Because of this, they didn’t follow the right steps before the changes were introduced. This opened the door for cybercriminals to use stolen credentials to get into Form 1099-Ks, which included private data like social security numbers.
PayPal found the problem in late 2022 and reported it to the authorities. The company has since fixed the issues and Strengthened its security measures, according to reports.
PayPal has also launched a new money pooling feature to help friends and family share expenses for group purchases.
Rolling out across the US, Italy, Germany, and Spain, the feature lets customers create a pool in the PayPal app or online. They can invite friends and family to add money, keep track of contributions, and move the funds to their PayPal balance to withdraw or spend.
PayPal Aims To Make Splitting Group Expenses Easier For Users
John Anderson, GM and SVP of consumer at PayPal noted that everyday life is about staying connected, whether it’s splitting costs for a gift or planning a trip with loved ones. PayPal is aware of this and wants to make it easier. He added that the company thrilled to offer a simple, free way to manage group expenses, helping people with both social and financial moments.
A 2024 PayPal survey showed that in the US, people pooled money for group purchases around 86 million times last year. Popular reasons included group gifts, travel, and events such as concerts or sports games.
Customers can create a pool free of charge in the PayPal app and add money to an existing pool with their PayPal balance or connected bank account. Organizers can invite anyone to contribute, even if they don’t have a PayPal account. Organizers can then move the collected money to their PayPal balance and spend it or transfer it to a bank account.
This new feature updates an older money pooling tool that was launched in 2017 but shut down in 2021. It ended because competitors offered similar options that didn’t require contributors to have a PayPal account—a problem the new tool solves.
