PayPal users are deleting their accounts with the service after warnings they could face fines of more than £2,200.

A policy update from the online payment service appeared to confirm that users could be fined £2,261.24 for spreading misinformation.

The news drew criticism from the company’s former president David Marcus.

He took to Twitter to say: “It’s hard for me to openly criticize a company I used to love and gave so much to. But PayPal ’s new AUP goes against everything I believe in.

“A private company now gets to decide to take your money if you say something they disagree with. Insanity."

 

PayPal quickly clarified that they would not be introducing the policy.

A spokesman said: “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy.”

However, a number of users had already started to look at ways to delete their Paypal accounts to avoid the fines.

Google analytics trackers revealed searches for ‘how to delete PayPal’ had surged following the confusion.

A spokesman for Financial World said: “PayPal has received backlash from their announcement, which was quickly retracted.

“Many posts can be seen highlighting the issue that PayPal announced they could deduct $2,500 straight from your account for misinformation, with hundreds of people suggesting closing their accounts to avoid this penalty.”