Remember the article from last week
about the provision in PayPal's User Agreement allowing itself to robo-call and robo text users for any reason? The FCC warned PayPal Thursday that the provision appeared to violate federal law.
"If PayPal plans to make autodialed, prerecorded, or artificial voice calls or text messages to its customers, please be aware that federal law places strict limits on such communications. For more than two decades, federal lawmakers have sought to protect consumers from harassing, intrusive, and unwanted calls and text messages."
The New York Attorney General's office also sent letters to both eBay and PayPal about such provisions. The St. Louis Post-Dispatch, which first reported the issue, said the PayPal / eBay terms of agreement included the warning, "Standard telephone minute and text charges may apply if we contact you" - a case of adding insult to injury.
The FCC said
violations of the Telephone Consumer Protection Act and could subject PayPal, its affiliates, and its service providers to penalties of up to $16,000 per call or text message. Interestingly we noticed there were reports of eBay making robocalls to customers in 2010 - we're not sure if eBay still does.
While the FCC believed it was a new provision, a PayPal spokesperson had told us it was not new, and in its blog it made it clear, "This is not a new section in the User Agreement."
PayPal stated in its June 5th blog post
about the issue (before receiving the FCC's letter), "We value our relationship with you and have no intention of harassing you." However, the provision grants PayPal permission to give collection agencies the right to robo-call and robo-text its customers - and collection agencies aren't known for self-restraint.
It's interesting that law enforcers reacted so quickly and so strongly about this particular issue. There have been other issues where eBay or PayPal have forced users to opt out of a particular policy rather than allowing them to opt in (the provision about opting out of the arbitration clause comes to mind), but generally such policies don't attract attention.
Look for more information in Monday's EcommerceBytes Newsflash
, and let us know if you've been robo-called or robo-texted from any ecommerce companies.