Consumer complaint received 2025-03-17 00:00:00
Product: Payday loan, title loan, personal loan, or advance loan — Personal line of credit
Issue: Charged fees or interest you didn't expect — 
Company: SYNCHRONY FINANCIAL
State: KS

Complaint narrative:
I want to report Paypal 's Buy Now, Pay Later deferred interest program. This program provides 0 % financing promotions where you avoid accumulated interest if the amount is paid off by the expiration date. When making a payment, you can select the option of paying a larger amount to avoid deferred interest and based on the verbiage it is positioned to the consumer that that amount will go toward upcoming deferred interest purchases ( nearing expiration ). However, I recently found out that Paypal is not prioritizing upcoming expirations when a consumer selects the payment option to " avoid deferred interest ''. In XXXX XXXX of my deferred promotions was set to expire. As a result, in XXXX I choose to make the " avoid deferred interest '' option to pay off this prior to the expiration date. My minimum to pay was {$30.00}. But to avoid interest I chose the option to pay {$230.00}. The financing in question was only {$170.00}. After making this option ( thinking I had met the terms ), Paypal instead applied the additional {$200.00} across multiple payments, leaving me with a balance on the expiring offer and hitting me with the interest once the item expired. I was never sent anything to let me know that the promotion had reached expiration without being fully paid. 

Over the past few months I have had some additional offers nearing expiration. I started noticing that the upcoming expiration balances were well below the amount I was being asked to pay in the system to avoid deferred interest - so after making each payment ( well over minimum - XXXX payments this year were $ XXXX ) I started reaching out to customer care each month to verify that the payments were going toward the upcoming expiring promotions. On one call I asked if my payment the next month would go toward the item expiring the next month if I paid the deferred interest amount and was told to call in and make sure it did. That seemed odd since the language on the payment option of avoiding deferred interest should have applied it to an expiring promo to ( in fact ) avoid the deferred interest. Had I not reached out personally, it was insinuated that the full amount would not have applied and I would have been hit with large accrued interest charges prior to it rolling into my running balance. 

Yesterday, I spoke with Paypal customer service because I noticed I only had one upcoming expiration of {$76.00} but my minimum to avoid was in the hundreds. On that call I found out about the XXXX expiration and it took me a long back and forth for the representative to acknowledge the issue vs. telling me I was wrong, change the distribution for XXXX and subtract the accrued interest from my balance. I now feel that there are likely past promotions that I had thought were paid off and I instead paid the accrued interest on them. I asked the rep confirm this via via chat and I'm not sure that the rep actually looked back in my history. At the end of the call he quickly ended the session without giving me adequate time to say if I was satisfied or had additional questions. 

I do not feel I am alone in this and think there are likely many consumers getting scammed by Paypal, unknowingly paying accrued interest when they thought they had fulfilled the obligation through a higher payment being made. Because of the language being used in the automated system, this practice is incredibly misleading. I attempted to reach out to Paypal Corporate to further pursue this matter but have found no one to contact beyond speaking to a customer care rep. I am attaching the full transcript from my discussion yesterday.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation