Google has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) following the agency's decision to place Google Payment Corp. under federal supervision.
The CFPB, which oversees banks and other financial institutions, recently expanded its scope to include digital payment apps, citing potential risks to consumers.
Google Pushes Back on CFPB's Supervision, Citing Discontinued P2P Service
The CFPB's order primarily focuses on the Google Pay app and its peer-to-peer (P2P) payment service, which was discontinued in the US earlier this year. The agency claims it has "reasonable cause" to believe Google's practices posed risks to consumers.
These concerns stem from customer complaints that suggest Google did not adequately handle mistaken transactions or provide clear outcomes from investigations into these errors. The order also highlights shortcomings in fraud prevention efforts.
However, the CFPB emphasized that the order does not accuse Google of wrongdoing or mandate immediate supervision. It leaves the option open to conduct further examinations.
According to Engadget, Google strongly disputes the CFPB's actions, describing them as an example of overreach. The company argues that its discontinued P2P payment service no longer presents any risks, making federal oversight unnecessary.
A Google spokesperson said the decision to supervise a product that no longer exists is unjustified.
CFPB Maintains Google Pay Supervision Amid Shutdown and 300 Complaints
Despite Google's objections, the CFPB believes supervision is warranted, even if the specific service is no longer active.
The agency has received nearly 300 complaints from customers regarding Google Payment Corp., which it claims justify additional oversight, Yahoo said.
The legal dispute highlights a broader issue: how regulators address emerging risks in digital payment systems. The CFPB recently finalized rules to supervise such platforms, reflecting growing concerns about fraud and consumer protection in the digital finance space.
While this battle unfolds in court, it underscores the evolving tension between tech giants and regulatory authorities. The outcome of this case could set a precedent for how other tech companies operating in the financial sector are treated.
For now, Google continues to defend its practices, while the CFPB maintains its position that protecting consumers from potential risks is paramount—even if those risks stem from a discontinued service.
