PayPal has closed 4.5 million accounts it says are linked to “bad actors”.

“We regularly assess our active account base to ensure the accounts are legitimate,” chief financial officer John Rainey said after the company released fourth-quarter results this week. 

“This is particularly important during incentive campaigns that can be targets for bad actors attempting to reap the benefit from these offers without ever having an intent to be a legitimate customer on our platform.”

The company says it closed down accounts that were taking advantage of its incentives and rewards programs.

Many were linked to PayPal’s sign-up incentives, introduced last year, which handed out up to $US10 to encourage new customers to open an account. 

The firm’s risk-management team discovered many of the accounts were started by bot farms. 

PayPal has been closing the accounts and attempting to recoup the incentives from customers, and will now refocus its marketing efforts on increasing usage of its products among active customers.

Shares of the company fell by the most on record after the announcement.