PayPal Holdings is cooperating with consumer watchdog the U.S. Consumer Financial Protection Bureau (CFPB) in a civil investigation relating to to its Venmo fund transfer app.
The CFPB demanded information for a civil investigation involving Venmo’s alleged unauthorized fund transfers and collections processes, according to a PayPal regulatory filing made on Friday. The civil investigative demand (CID) from the CFPB was originally made on Jan. 21, PayPal said.
Shares of PayPal were down 1.7% to $265.89 on Friday morning after rising 7.3% on Thursday following a strong fourth-quarter earnings report.
PayPal makes money via transaction fees charged to users. Venmo has been part of PayPal since 2013 and processed about $47 billion in total payments volume in 2020, up 60% from the previous year.
This is not the first time the CFPB has investigated PayPal.
In 2015, PayPal refunded $15 million to customers and paid a $10 million fine for illegally signing up customers for its online credit product, PayPal Credit, formerly known as Bill Me Later.
On Wednesday, PayPal topped fourth quarter estimates, saying its payment services are in high demand as a result of the Covid pandemic.
PayPal registered profit of $1.57 billion, or $1.32 per share, in the fourth quarter, up from $507 million, or 43 cents per share, a year earlier. The FactSet analyst consensus called for EPS of 62 cents per share in the latest quarter.
Adjusted earnings per share totaled $1.08, topping the analyst consensus of $1.
Revenue surged 23% in the fourth quarter to $6.12 billion from $4.96 billion last year. The analyst consensus called for revenue of $6.09 billion.