He (CFPB) said Friday that it ordered federal oversight of Google Payment Corp. after determining that it meets the legal requirements for such oversight. The CFPB oversees banks, credit unions and other financial institutions, and recently finalized a rule to oversee digital payment apps. In it which focuses on the Google Pay app and its peer-to-peer (P2P) payment service (discontinued in the US earlier this year), the CFPB said it has “reasonable grounds to determine that Google has participated in conduct that poses risks to consumers.” Google filed a lawsuit shortly after the announcement to challenge the decision. <a target="_blank" data-i13n="elm:context_link;elmt:doNotAffiliate;cpos:4;pos:1" class="link " href="https://www.reuters.com/technology/us-regulator-places-google-payment-corp-under-supervision-2024-12-06/” rel=”nofollow noopener” target=”_blank” data-ylk=”slk:Reuters;elm:context_link;elmt:doNotAffiliate;cpos:4;pos:1;itc:0;sec:content-canvas”> information.
The risks identified by the CFPB are related to Google's handling of erroneous transactions and fraud prevention. Based on customer complaints, the order said it appears that Google did not adequately investigate the erroneous transfers or adequately explain the findings of its investigations into these issues. The complaints also indicate that Google did not do enough to prevent fraud, according to the order. However, the CFPB's announcement notes that the order “does not constitute a finding that the entity committed wrongdoing” nor does it “require the CFPB to conduct a supervisory review.”
In a statement to said a Google spokesperson: “This is a clear case of government overreach involving Google Pay peer-to-peer payments, which never posed risks and is in the United States and we are going to challenge it in court.” The CFPB order acknowledges that Google Pay was suspended, but says this “is not a basis for refraining from designating Google for oversight,” although it could affect whether it decides to conduct an investigation.
