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EcommerceBytes-NewsFlash, Number 2748 - February 27, 2012 - ISSN 1539-5065    2 of 5

PayPal Changes Customer Identity Program, Amends Privacy Policy

By Ina Steiner
EcommerceBytes.com
February 27, 2012




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PayPal is making changes to its privacy policy that will go into effect on April 1, 2012. The online payments unit of eBay is also adding extensively to its "Identity Authentication" section that all buyers and sellers must agree to as part of the User Agreement.

PayPal said it was making changes to its Customer Identification program "as a result of changes in the law."

Somewhat ironically, an alert reader noticed that PayPal users are unable to opt-out of AdChoice, a program that allows PayPal and other eBay entities to share information about visitors' past activities with its partners in order to serve up targeted advertisements, both on and off of eBay websites. When attempting to opt-out of AdChoice on PayPal, the following error message is displayed: "We're sorry, we can't change your preference at this time."

As part of the changes that take effect beginning in April, Section 2.3 of the User Agreement addresses the types of information PayPal collects and currently reads:

Identity Authentication. You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your identity. This may include asking you for further information, requiring you to provide a taxpayer identification number, requiring you to take steps to confirm ownership of your email address or financial instruments, ordering a credit report, or verifying your Information against third party databases or through other sources.

Effective Date: April 1, 2012, Section 2.3 will read as follows:

You authorize PayPal, directly or through third parties, to make any inquiries we consider necessary to validate your identity. This may include asking you for further information, requiring you to provide your date of birth, a taxpayer identification number and other information that will allow us to reasonably identify you, requiring you to take steps to confirm ownership of your email address or financial instruments, ordering a credit report, or verifying your Information against third party databases or through other sources. We may also ask to see your driver's license or other identifying documents at any time. If you use certain PayPal Services federal law requires that PayPal verify some of your Information. PayPal reserves the right to close, suspend, or limit access to your Account and/or the PayPal Services in the event we are unable to obtain or verify this Information.

PayPal is also amending its Privacy Policy and recommended users review the updated policy in its entirety. The amended Privacy Policy is effective April 1, 2012 for existing users and effective upon acceptance for new users.

Among the changes is how PayPal collects information about users. "We have amended this section to address how PayPal collects data from your computer, mobile phone or other access device," according to the notice. "We may also collect information about your use and interaction with our website, application or the PayPal Services."

PayPal also have amended the section on cookies "to reflect our use of session and persistent cookies, Local Shared Objects (commonly referred to as "Flash Cookies") and the use of pixel tags," and amended the marketing section "to address opting-out of notifications via our application and SMS messages.

More information is available on the PayPal Upcoming Policy Updates page.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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