PayPal this week caused an uproar when it rolled out an updated user agreement that added a clause that allowed the company to pester users with robocalls and text messages – not only to the number they provided PayPal, but also to other numbers PayPal is able to obtain. While PayPal at times may need to call or text you regarding account activity or to settle disputes, the new agreement also broadly gave the company the ability to send out surveys, offers and promotions through automated means. What’s worse is that there was no opt-out mechanism provided for these actions. But now there will be, the company tells us.
According to a company spokesperson, “PayPal customers can opt-out of receiving auto-dialed or pre-recorded calls.”
This appears to be a change in course for the company following consumer pushback about the new user agreement. As Credit.com reported this week, when a customer on PayPal’s Facebook page asked to opt-out of the robocalls provision, he was instead offered instructions to close his PayPal account. (See image below).
That conversation prompted the National Consumer Law Center, a nonprofit consumer advocacy group, to draft a letter to the FCC asking it to “clarify that withdrawal of consent for auto-dialed calls cannot be grounds for terminating a contract.” The letter will be signed by several consumer groups and delivered this week.
In case you missed the commotion, the updated agreement posted here on PayPal’s website is set to go into effect on July 1, 2015. As part of the changes, PayPal expanded section 1.10 of the agreement to allow the company to “poll your opinions through surveys or questionnaires,” as well as “contact you with offers and promotions.”
The prior version of the user agreement didn’t include these items, though it did state that PayPal customers were agreeing to receive autodialed and prerecorded message calls and automated texts, both from PayPal and its network and from service providers like billing and collections companies.
Here’s the clause in question:
You consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided us or that we have otherwise obtained. We may place such calls or texts to (i) notify you regarding your account; (ii) troubleshoot problems with your account (iii) resolve a dispute; (iv) collect a debt; (v) poll your opinions through surveys or questionnaires, (vii) contact you with offers and promotions; or (viii) as otherwise necessary to service your account or enforce this User Agreement, our policies, applicable law, or any other agreement we may have with you.
…
If a telephone number provided to us is a mobile telephone number, you consent to receive SMS or text messages at that number. We won’t share your phone number with third parties for their purposes without your consent, but may share your phone numbers with our Affiliates or with our service providers, such as billing or collections companies, who we have contracted with to assist us in pursuing our rights or performing our obligations under this User Agreement, our policies, applicable law, or any other agreement we may have with you. You agree these service providers may also contact you using autodialed or prerecorded calls and text messages, as authorized by us to carry out the purposes we have identified above, and not for their own purposes. Standard telephone minute and text charges may apply if we contact you.
Today, both the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act ban most robocalling and texting, notes Credit.com, and the “existing business relationship” exception that applies to the Do Not Call list still requires companies to get written or oral consent before robocalling customers.
In addition, as The Washington Post pointed out earlier, PayPal’s agreement may also conflict with the FCC’s proposed new rules that would crack down on telemarketing and robocalls. The proposal would allow consumers to opt-out of telemarketing calls without having to fill out forms, would allow phone carriers to block robocalls automatically and offer this as a service to customers, and would redefine “auto-dialing” to close up loopholes that telemarketers and businesses could previously wiggle through.
The FCC plans to vote on the proposal on June 18 – ahead of PayPal’s new user agreement going live.
What’s unclear at this time is exactly how PayPal will be honoring users’ rights to opt-out of receiving auto-dialed or pre-recorded calls. There doesn’t appear to be an online form or an email address to contact.
According to users’ posts to PayPal’s Facebook page, the company doesn’t seem to know how to handle incoming phone calls regarding the new terms of service either. As PayPal customer Paula Trentman complained today on the Facebook page, “3 transfers and 1 disconnect regarding the new terms of service… back on the phone again.”
We’ve asked PayPal for the details on how consumers can opt-out, given its new statement on the matter. The company has not yet provided those details. If and when it does, we’ll update the post with that information.
Update, 6/5/15, 11 pm et: PayPal has published a blog post to provide clarity on the matter. The post explains that the section in the user agreement is not new, and that the company uses technologies like this to help service customer accounts. Those who don’t want to be autodialed can contact PayPal support to opt out.
Note that earlier today we’ve heard from some customers who said they were unable to receive opt out help when calling PayPal’s support line. The company has now sent out an internal communication to its customer support teams so they are all prepped to help PayPal customers, we’re told.
Update, 6/8/15: We’re continuing to hear from customers dialing the call center that repos are telling them they cannot opt out. Your mileage may vary, but it doesn’t look everyone “got the memo,” so to speak.
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