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PayPal Forced to Change Robocall Provision

PayPal apologized to users over its so-called “robocall” policy on Monday and said it was updating its User Agreement. The provision gave PayPal the right to robocall or robo-text users at for any reason, from debt collecting to advertisements to opinion polling, but it turns out some of those activities may have been illegal.

The issue reportedly came to light when PayPal told a user in response to an inquiry on Facebook that there was no way to opt out of the calls.

PayPal responded to media reports with a blog post in early June saying it had no intention of harassing users – “Our contacts with you are intended to benefit our relationship. For example, we may contact you as part of our fraud prevention efforts to keep your PayPal accounts safer and more secure.”

The issue then gained the attention of regulators, including the New York Attorney General and the FCC, and ultimately lawmakers.

PayPal’s General Counsel Louise Pentland again turned to the PayPal blog, this time blaming confusion over how it communicated to users. In her June 29th post, she wrote, “We value our relationship with our customers and work hard to communicate clearly. Recently, however, we did not live up to our own standards. In sending our customers a notice about upcoming changes to our User Agreement we used language that did not clearly communicate how we intend to contact them. Unfortunately, this language caused confusion and concern with some of our customers.”

She said PayPal will be modifying the terms of Section 1.10 of our User Agreement “to clear up any confusion.”

The new language is intended to make it clear that PayPal primarily uses autodialed or prerecorded calls and texts to:

  • Help detect, investigate and protect our customers from fraud
  • Provide notices to our customers regarding their accounts or account activity
  • Collect a debt owed to us

In addition the new Sections (1.10(a) and 1.10(b)) will make it clear that:

 

  • We will not use autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent
  • Customers can continue to enjoy our products and services without needing to consent to receive autodialed or prerecorded calls or texts

 

  • We respect our customers’ communications preferences and recognize that their consent is required for certain autodialed and prerecorded calls and texts. Customers may revoke consent to receive these communications by contacting PayPal customer support and informing us of their preferences.

Pentland said PayPal had been working with regulators “to clarify that our focus is on our customers, on consumer protection and on doing the right thing.”

And, she wrote, “We appreciate the feedback our customers have provided to us on this issue and apologize for any confusion we may have caused.”

The FCC had sent PayPal a letter on June 11, 2015, to clarify the company’s responsibilities under the Telephone Consumer Protection Act. On Monday, FCC Chief Travis LeBlanc issued the following statement:

I commend PayPal for taking steps to honor consumer choices to be free from unwanted calls and texts. The changes to PayPal’s user agreement recognize that its customers are not required to consent to unwanted robocalls or robotexts. It clarifies, rightly, that its customers must provide prior express written consent before the company can call or text them with marketing, and that these customers have a right to revoke their consent to receive robocalls or robotexts at any time. These changes, along with PayPal’s commitments to improve its disclosures and make it easier for consumers to express their calling preferences, are significant and welcome improvements.

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Ina Steiner
Ina Steiner
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. See disclosure at EcommerceBytes.com/disclosure/.