PayPal announced the news in a Securities and Exchange Commission filing, where it says the CID was sent as a part of its investigation to see if Venmo, and thereby PayPal, has been “engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act.”
“The CID requests the production of documents and answers to written questions related to our Venmo service,” the company states in the filing. “We are cooperating with the FTC in connection with the CID.”
PayPal is worried about what the investigation could lead to, saying it could have to change the way it operates Venmo.
“The CID could lead to an enforcement action and/or one or more consent orders, which may result in substantial costs, including legal fees, fines, penalties, and remediation expenses and actions, and could require us to change aspects of the manner in which we operate Venmo.”
Amanda Christine Miller, PayPal’s global head of corporate media relations, says the company is working with regulators to make sure people have “positive experiences” when using the company’s services.
“We consult and collaborate with regulators and work hard to comply with laws and regulations in the markets where we do business, around the world,” Miller said. “We are cooperating fully with the Federal Trade Commission to address their requests for information.”
It’s still unclear what exactly the FTC is investigating in Venmo.
The news comes a few days after PayPal reported one of its best quarters ever, and the investigation is sure to cause worry for not only the company, but its investors as well.
Venmo is currently one of the most popular peer-to-peer payment apps, competing with the likes of Google Wallet, and Square Cash. In January, the company reported that more than $1 billion in payments were made on Venmo.
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