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Tulipshare calls on PayPal to end discriminatory account suspensions

Tulipshare calls on PayPal to end discriminatory account suspensions

Tulipshare, a mobile app that empowers individuals to drive ethical change at public companies by becoming a shareholder, has filed a proposal to PayPal, calling on the company to ease account suspensions and provide non-discriminatory financial services to all users.

Tulipshare’s proposal follows campaigns launched by the American Civil Liberties Union (ACLU) and a petition on Change.org asking PayPal to end its biased practices in account suspensions.

PayPal’s Acceptable Use Policy details a non-exhaustive list of activities requiring pre-approval, though there is no remediation information for users seeking to appeal account suspensions or deactivation.

Tilipshare says these policies have been shown to disproportionately harm groups of people, such as sex workers and members of the balck community. PayPal has also been accused of routinely targeting users for speech protected by the First Amendment. The company has frozen the account of News Media Canada for a payment to submit an article about Syrian refugees for an award, shut down pro-democracy accounts in Hong Kon, and terminated service to a user for using an open-source software that enables anonymous communication.

Tulipshare is calling on PayPal to begin providing clearer explanations of the number and categories of account suspensions that may reasonably be expected to limit freedom of expression or access to information or financial services. If implemented accordingly, this means that if PayPal decides to close an individual or business account, the company must provide meaningful notice about the particular Terms of Services provision that was violated, and users should have the opportunity to appeal the decision in a timely and efficient manner.

Antoine Argouges, Chief Executive and Founder of Tulipshare comments: “By not being transparent with users around their policies and reasons for exclusion from their platform, PayPal is missing out on the opportunity to service these users. Not only has this approach shown to be discriminatory, but it is losing out on potential market share and revenue as a result. We hope to be joined by many shareholders and we welcome other like-minded retail investors to have their say on the proposal by joining our campaign.”

Comments: (3)

A Finextra member
A Finextra member 10 January, 2023, 16:58Be the first to give this comment the thumbs up 0 likes A great initiative but its scope should also include ethical change in government behaviour. Payment companies are boxed in by governments in two ways: 1. Direct pressure - for example the Canadian govt ordered bank accounts to be frozen last year of peaceful protesters and anyone donating to them. Given the revelations coming out of Twitter of egregious interference by govt agencies in social media it is quite possible (likely) they are applying similar pressure to payment processors 2.Regulatory complexity - it can be easier for payment processors to close accounts and ban user types than deal with the regulatory cost and time overhead. Payment processors also have to consider reputation risks in dealing with certain customer types and the threat of having licences removed. Therefore it is quite understandable, although very concerning, that payment processors have biased practices. ‘Financial inclusion’ has become a mantra for FS and Fintech but the reality is the actions of governments and regulators can drive financial exclusion in digital financial services as described above. In a free society governments are accountable to society but increasingly governments are using technology to reverse this and become authoritarian, as is seen in payments. This is why CBDCs are so problematic without the correct design. Society needs to be vigilant and hold governments to account to act ethically as digital financial services develop. We need an app for that too.
Ingus Linkevics
Ingus Linkevics - Fairmay Ltd - London 10 January, 2023, 17:08Be the first to give this comment the thumbs up 0 likes

It would be much more informative if the article contained the actual Tulipshare's proposal to PayPal. Curious to see their actual proposal.
'Cause based on those couple of examples above it's highly likely PP had good reasons for terminations.
I wouldn't take neither side as likely there are hundreds of cases where PP is not fair suspeding/closing accounts but they are covering theirs to avoid potential fines (and that's business). But hey listen, they are FI, and we all have our share of stories where seemingly unfair treatment by banks of FIs has been applied without giving fair reason. And let's be honest - in most cases reasons will not be disclosed by bank/FI - aml & compliance stands above customer satisfaction, and that will stay so. Imagine if all suspended/terminated accounts could regain their access by going out to media... highly... unlikely

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 11 January, 2023, 13:18Be the first to give this comment the thumbs up 0 likes

"missing out on the opportunity to service these users". "losing out on potential market share and revenue".

Translation: Company is failing in its fiduciary duty to MSV.

In short, TulipShare has converted consumer activism into shareholder activism. 

A company can easily rebuff Consumer Activism by saying it's a private sector company and is under no obligation to uphold First Amendment freedom of speech and can jolly well provide services to who it wants to and deny it to who it does not want to. 

But, going by the case of, say, Engine No. 1 v. Exxon-Mobil, it's not so easy for a company to rebuff Shareholder Activism.

Novel strategy. I give it a fair chance of working where decades of complaints by blocked PayPal mechants have failed.