PayPal Secretly Transmits Venmo Users’ Info to Third Parties, Class Action Lawsuit Alleges

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A proposed class action lawsuit alleges that PayPal has surreptitiously implemented tracking technologies on the Venmo platform that transmit users’ transaction information to third parties without consent, despite assurances that such data is kept private.

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The 57-page lawsuit contends that PayPal, which owns and operates Venmo, represents in its privacy policy that Venmo does not disclose a user’s personal information to third parties for promotional or marketing purposes, and that only “public information”—a “defined and narrow category,” per the case—may be seen, accessed, or downloaded through Venmo’s APIs or third-party services integrated with the company’s products.

The complaint says that despite PayPal’s privacy assurances, the defendant has embedded into Venmo certain third-party tracking technologies that enable third parties, such as mParticle and Kochava, to intercept, among other identifiers, a sender’s full name, email address, phone number, amount paid, the contents of a note describing a transaction, the identity of the recipient, and more.

“This was not a technical accident or an incidental byproduct of routing a payment,” the filing charges. “PayPal chose to install the Tracking Technology, chose which screens and events it would fire on and collect, and chose which data fields it would transmit.”

According to the suit, marketing materials for Venmo implore consumers to “[s]end dollars, not financial details,” and advertise that all transactions made through the platform are secure. The case says that users are also given the option to mark transactions as “Private,” ostensibly meaning that transaction details are shared only with the recipient and on the sender’s personal transactions feed. Further, Venmo’s privacy statement clearly states that “Venmo does not disclose your personal information to third parties for their promotional or marketing purposes,” the suit adds.

Importantly, the lawsuit says that none of the information transmitted about Venmo transactions is anonymized or aggregated. To the contrary, PayPal transmits Venmo transaction information with persistent unique identifiers that can be used to track a person’s activities over time across different applications, websites and devices, the complaint says.

The lawsuit stresses that users routinely use the “note” section of a Venmo transaction to disclose what the payment is for, including those related to medical treatment, rent and housing payments, political or religious donations, personal relationships, and “countless other intimate details of a person’s life.”

Further, the case says that Venmo users did not and could not consent to the disclosure of their personal and private transaction information, as the tracking technologies operate “invisibly” in the background, and the platform does not divulge that payment amounts, recipients and transaction notes are transmitted to data companies.

The complaint conveys that financial transaction information is among the most desirable categories of data for advertisers because it reflects actual consumer behavior instead of prospective predictions.

In addition, once PayPal transmits Venmo transaction details to third parties, it can no longer control how such information is used or disclosed, meaning it cannot “credibly represent” the risk to consumers’ privacy, the filing claims.

The Venmo class action lawsuit looks to cover all individuals in the United States who used the Venmo platform, had their privacy settings set to “Private” or enabled at least one transaction set to “Private,” whose personally identifiable information was disclosed to, transmitted to, made accessible to, or intercepted by third parties and who have not filed a demand for arbitration against PayPal relating to the alleged misconduct.

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