If there’s one thing 2025 is teaching us already, it’s that even the most trusted tools can find themselves under the microscope. This time, the heat is on Honey—a browser extension acquired by PayPal in 2020 for a staggering $4 billion. Promising effortless savings for users by automatically applying coupons during checkout, Honey gained traction through big-name endorsements from YouTube stars like MrBeast and Linus Tech Tips. But recent allegations suggest that Honey’s business practices may not be as sweet as they seem.
The Allegations
MegaLag, a New Zealand-based tech YouTuber, dropped a bombshell in his December 21st video, “Exposing the Honey Influencer Scam,” which has since amassed over 13 million views. His claims? Honey and PayPal have been engaging in practices that harm both shoppers and influencers (related videos at end of article):
• Affiliate Commissions Misappropriated: MegaLag alleges that PayPal, via Honey, has been poaching affiliate commissions rightfully belonging to influencers who initially referred users to specific products. • Discount Manipulation: Honey allegedly prioritizes lower-value discount codes over better deals, potentially leaving users out of pocket. • Massive User Drop-off: Following the video’s release, Honey reportedly lost 3 million users in under two weeks—a claim corroborated by Google Chrome Store data from Wayback Machine.
“This could go down as one of the boldest marketing scandals of the century,” MegaLag declared in his 23-minute exposé.
PayPal and Honey Respond
Unsurprisingly, Honey’s spokesperson pushed back. “Honey is free to use and provides millions of shoppers with additional savings on their purchases whenever possible,” they stated. They also emphasized compliance with industry standards, including last-click attribution—the method used to determine commission eligibility.
But for many, the damage to public trust may already be done.
The Lawsuit and Its Implications
The fallout didn’t stop at public opinion. On December 29, lawyers representing content creators filed a $5 million class-action lawsuit against PayPal, alleging fraudulent practices related to affiliate commissions. While MegaLag is not a plaintiff, his video has fueled much of the public scrutiny.
But Here's the Deal: I Believe There's More- The Bigger Picture
The Honey controversy sheds light on a critical intersection of business practices, influencer responsibility, and consumer trust. It also exposes a lesser-discussed risk: influencers themselves may face significant legal and reputational fallout if they mishandle their role in this saga. Here’s why it matters.
What if Honey Did Nothing Wrong and the Influencers Misrepresented the Product and Service?
At the center of the allegations lies Honey’s Terms of Service (TOS) and influencer agreements. If these agreements explicitly grant Honey the right to adjust affiliate links, prioritize certain discount codes, or make internal decisions about which offers appear, the company may have acted within its legal bounds. Yet, legality and transparency aren’t always synonymous.
Did the influencers read these documents? Did they fail to disclose this information in their paid for and often hyped up content?
Dense and often overlooked, TOS and influencer agreements form the foundation of business and user relationships. If influencers fail to scrutinize these terms before partnering with a company, they risk misrepresenting the product to their audiences. This can lead to a breakdown of trust—not just in the product but in the influencer themselves.
Influencers as Trusted Advocates—And Potential Defendants
Influencers play a pivotal role in shaping public perception of a product. Their endorsements are valued because they appear authentic and relatable. However, this trust comes with an obligation to fully understand the products they promote.
If influencers misrepresent a product—whether by exaggerating its benefits or failing to disclose its limitations—they may mislead their audiences. In the case of Honey, if influencers overstated the extension’s ability to deliver the best discounts or failed to explain its mechanics, they may have set unrealistic expectations.
The risk escalates further if influencers publish follow-up “disclosure” videos accusing the company of misconduct without solid evidence. Such actions could expose influencers to legal claims, including:
• Defamation: Publicly stating that Honey or PayPal engaged in fraudulent or unethical practices without sufficient evidence could harm the company’s reputation and lead to lawsuits. Companies with resources like PayPal are well-equipped to defend their interests. • Fraud or Misrepresentation: Influencers spreading false or negligent statements about a product’s functionality or ethics may face claims of fraud, especially if these statements result in financial harm to the company. • Interference with Prospective Economic Relationships: If an influencer’s allegations discourage retailers, consumers, or partners from working with Honey, they could be held liable for interfering with the company’s business relationships.
These risks are compounded by the fact that influencers are rarely legal or business experts. Making bold claims about fraud or ethical breaches without fully understanding the company’s TOS, the influencer agreements they entered into (they did use written agreements right?) or industry norms is not only reckless—it could be actionable in court.
The Risks of Reactionary Content
In the rush to respond to controversies, influencers often feel compelled to produce dramatic, attention-grabbing content arguing they are victims too.
Are they?
Did Honey and PayPal fail to disclose or did influencers fail to fully understand the underlying business model and what was happening per the written terms and conditions of all written agreements?
I don't know the answer, but here's the thing.
A sensationalized or poorly researched commentary can perpetuate the same kind of misleading rhetoric that created the controversy in the first place.
This is where influencers face a precarious balance. If they criticize a company without solid evidence or an accurate understanding of the facts, they risk damaging their own credibility and inviting legal consequences and money damages (loss of reputation and profits). Worse, they could erode the trust of their audience—their most valuable asset.
A Call for Accountability
Transparency and accountability are not one-sided. Both companies and influencers share the responsibility of ensuring accurate and ethical communication:
• For Companies: Businesses like Honey must ensure their agreements and practices are clear, ethical, and easily understood by users and partners. Lack of clarity breeds mistrust. • For Influencers: Influencers must take the time to: • Understand the Product: Know its capabilities, limitations, and terms of service before promoting or critiquing it. • Verify Claims: Support all public statements with evidence and, where necessary, consult experts to ensure accuracy. • Avoid Reactionary Commentary: Resist the urge to join public outrage without thorough analysis. Knee-jerk responses often lead to errors that can harm both the influencer and the company.
The Broader Implications
When influencers fail to exercise caution, the damage isn’t confined to the individual or company involved—it reverberates across the entire influencer economy. Audiences expect influencers to be reliable sources of information, especially when transitioning from promotion to critique. Missteps erode not just individual reputations but trust in the profession as a whole.
Why These Details Matter
The Honey controversy is a powerful reminder of what happens when transparency and communication fail. It underscores the fragile balance between corporate practices, influencer responsibility, and consumer trust. When any piece of this triad falters, the consequences ripple far and wide.
For companies, clarity in their terms, agreements, and practices is essential—not just to avoid legal claims but to maintain the trust that underpins their brand. Ambiguities or decisions made without adequate disclosure leave the door open to accusations of deception, damaging both reputation and bottom line.
For influencers, the responsibility is equally critical. Their endorsements are seen as authentic, which is why their audiences trust them. But that trust is earned—not given—and it hinges on an influencer’s ability to fully understand and accurately represent the products they promote. Failing to do so, whether through negligence or a desire to rush content, doesn’t just harm the audience. It risks eroding the influencer’s credibility, entangling them in legal disputes, and jeopardizing their career.
The real danger lies in the aftermath. Influencers who hastily jump into public criticism without verifying their claims or understanding the legal and business nuances of a situation risk compounding the problem. By spreading unverified or exaggerated accusations, they may inadvertently harm the company’s reputation and business relationships, exposing themselves to legal liability for defamation, fraud, or interference with prospective economic relationships.
This case highlights a critical point: trust is the currency of modern business, whether you’re a company or an influencer. Without it, everyone loses. The company suffers reputational and financial damage. Influencers jeopardize their careers. Consumers, caught in the middle, walk away feeling misled and betrayed.
When All is Said and Done
Transparency and accountability are not optional. For companies, this means aligning practices with user expectations and ensuring agreements are clear and upfront. For influencers, it means committing to due diligence—testing products, reading terms, and communicating accurately. In the age of hyperconnectivity, where trust is built or lost in seconds, there’s little room for error.
I can’t say for certain what did or didn’t happen in this case, but I’ll be watching closely. Maybe this is a case of intentional fraud. Maybe it's a case of influencers taking the money and making product claims without understanding the details. Maybe it's a combination of both.
If anyone has access to the original Terms of Service or influencer agreements that were in effect when Honey first partnered with these creators—along with any modifications or amendments—I’d be very interested in seeing them.
Mitch Jackson, Esq. https://bsky.app/profile/mitch.social
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Related videos:
Exposing the Honey Influencer Scam via Megalag https://youtu.be/vc4yL3YTwWk?si=I8hPLnEm1XyOO24F
The Honey Scam: Explained via Marques Brownlee https://youtu.be/EAxRtMKPm8?si=Q_Cp1xf-9mOHcQB-
I Sued Honey For Their Creator Scam https://youtu.be/kwBD-TQlhfU?si=4qqoEIArd3ng2fj9
Music lawyer Krystle Delgado dived a bit deeper in this morning video. It's a spot on analysis and worth watching. https://youtu.be/qk6SVwclTr8?si=0LHrwbJyUPHSzDV1