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June 15, 2015

PayPal Gets Its Wrist Slapped by FCC for Violations

Filed under: Internet,Telephone — Edgar (aka MrConsumer) @ 5:49 am

  In May, PayPal sent its customers an email notifying them of forthcoming changes to the PayPal User Agreement because eBay and PayPal are becoming separate companies.

One section of that revised agreement announces changes to how the company can contact you.

In short, it provides that you automatically give permission to PayPal to call or text you, via autodialed or prerecorded call, on any telephone number (cell or landline) you have given them or that they can find for you, for almost any purpose including to sell you stuff and to collect debts.


1.10 Calls to You; Mobile Telephone Numbers. 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. The ways in which you provide us a telephone number include, but are not limited to, providing a telephone number at Account opening, adding a telephone number to your Account at a later time, providing it to one of our employees, or by contacting us from that phone number. 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.

It also provides that if you don’t like it, you can cancel your account:



There is just one small problem with all of this. It is illegal. PayPal cannot just impose all these terms. With respect to robocalling, for example, they have to get your express written permission to allow it. They also have to tell you that you are not required to agree to these terms and they cannot deny you services or terminate your account if you opt-out. Oops.

Here, for your reading pleasure, is the much too polite letter that the FCC sent to PayPal last week:

Click top right corner to enlarge.

Because of the uproar created about the calling changes even before the FCC letter was sent to PayPal, the company posted a link in their blog to opt-out of being called. In relevant part, the post says this:

You can choose not to receive autodialed or prerecorded message calls by clicking here and contacting customer support.

MrConsumer clicked that link and only found the means to contact PayPal by phone or email message. There was no specific opt-out choice. So he filled out their form, using the closest relevant topic (changing/updating account information) and said that he wanted “to opt-out of all calls and texts from PayPal.”

What did he get back from them? An automated, non-responsive answer, that in essence says to write again. Great work, Paypal.

PayPal answer

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  1. The forced-opt-in approach is so 1990’s. What were they thinking that they could force this for marketing purposes? I’d opt-in in a moment for fraud-prevention but not for cross-sell use.

    Comment by Marc — June 15, 2015 @ 8:33 am
  2. Paypal is one of the worst companies in history.

    Closing your account is a wise choice is any situation when dealing with them.

    I would rather pay for a website purchase directly with a credit card. Yes there is a chance your credit card number could get compromised by using it on random websites, but you are protected! The CC is very willing to work WITH you, not AGAINST you like Paypal does.

    Also consider looking into one-time-use credit card numbers if you are really concerned about online purchases (both from compromising your account and to avoid unwanted recurring charges)

    Comment by Pierre K — June 15, 2015 @ 8:46 am
  3. I’m not surprised that Paypal initiated this policy.

    I am surprised that the FCC was quick to act. I’d like to see where this goes. Good on the FCC, but the next step is putting some weight behind their warning.

    Comment by Wayne R — June 15, 2015 @ 9:10 am
  4. I decided to look at my acct terms to see if it would affect me and happily i found out it won’t. Why ? simple..i never gave them my phone number.

    They just have my basic info, name, address and cc info.

    I do not text, no smart phone, no social media so basically no onlie profile and that means no company can contact me for anything.

    So i am not sure, maybe someone can tell me, why they need your phone number or why did you give it to them.

    Since my acct works fine without it why not just go to your acct and temove your number ?

    Comment by Tom B — June 15, 2015 @ 4:07 pm
  5. @TomB — Even if you didn’t leave a phone number, PayPal is stating they’ll contact you “at any telephone number that you have provided us or that we have otherwise obtained.” Given their wide reach, I expect PayPal can locate other telephone numbers associated with any person. Closing the account ismy choice for dealing with their over-reaching. I won’t support a company that doesn’t respect my requests for privacy.

    Comment by Jim K — June 15, 2015 @ 6:54 pm
  6. I emailed Paypal also. I said I want to opt out all calls and texts from PayPal. The FCC does nothing! They send a letter to Paypal, but don’t reinforce it. They did at one time, in the past. https://www.donotcall.gov/ I hope they get their act together!

    Comment by Marvin — June 15, 2015 @ 7:42 pm
  7. @TomB – Even if I were to remove it, it’s already been there. I can’t recall if my profile has it attached or not, but I once had to call them two years ago to resolve a dispute with my bank, so they would have gotten it that way.

    Comment by Sarah — June 15, 2015 @ 8:01 pm
  8. Paypal doesn’t let you remove it. The best you can do is change it to a fake number at this point. I’m not going to sit on hold for an hour to get a human to hope they mark my account correctly. I already removed my bank from them as the current setup wouldn’t let me choose my CC if I had a bank account in there. Calling them to complain about that got me nowhere also. Twice they took money from my bank instead of my CC when I had selected CC and verified the payment showed from my CC.

    Comment by jt4703 — June 16, 2015 @ 6:40 am
  9. I, too, got the form letter and made a further inquiry. Here’s the exact quote the human rep sent when I requested to opt out from robocalls: “Good news! I have opted you in receiving automated calls from PayPal.” This doesn’t engender trust that with PayPal.

    Comment by Kevin Hisel — June 16, 2015 @ 1:01 pm
  10. I called Paypal today and opted out successfully!

    Comment by Ryan — June 16, 2015 @ 2:17 pm
  11. (I emailed Paypal also. I said I want to opt out all calls and texts from PayPal)

    I too am not going to sit on hold for 15 min! In addition they want my cell phone number, to call me on my home phone, and cell phone! What a crock!

    Here’s the reply:

    Dear Marvin,

    Thank you for contacting PayPal Customer Support. My name is XXXX and I am happy to assist you. If you could give us a call at 888-221-1161, we will be sure to get that fixed for you.

    Don’t forget, we’re always around if you need us. Just click “Help” in the top right corner of any PayPal page to visit our improved Help Center.

    Add your mobile number to your PayPal account so we can reach you right away if we ever need to verify account activity with you. Simply log in to your PayPal account, click “Profile” near the top of the page and then click “Update” beside “Phone.”

    You can also make and receive payments with your mobile phone when you add it to your PayPal account. After you confirm your number and create a PIN, you’ll be able to get money, send money, check your balance, or manage your account from your phone using simple text messages.

    PayPal Customer Solutions

    Comment by Marvin — June 17, 2015 @ 11:12 am
  12. Today, June 28,2015, I found no place on the PayPal website to opt out, not only from email messages, but from any future telephone calls. I was told by the representative that they have not worked that out yet. I closed my account.

    Comment by Nathan L. Jacobson — June 29, 2015 @ 12:13 pm
  13. http://www.nbcnews.com/news/us-news/paypal-backs-down-controversial-new-robocall-policy-n384116

    Jun 29 2015, 8:11 pm ET

    PayPal Backs Down on Controversial New Robocall Policy

    PayPal reversed course Monday on a controversial new policy that would have automatically “opted in” its users to receive robocalls and text messages from the company.

    The online payments company angered users, lawmakers and federal regulators on June 11 when it said it would begin contacting customers with “autodialed or prerecorded calls and text messages” even if they hadn’t given PayPal permission — and even if they never gave PayPal their phone numbers at all.

    The only recourse for PayPal’s 165 million registered users against the policy — which was scheduled to go into effect Wednesday — would have been to stop using PayPal.

    Consumer activists and the Federal Communications Commission objected, and after meeting with the chief of the FCC’s enforcement bureau, PayPal relented on Monday.

    “We value our relationship with our customers and work hard to communicate clearly. Recently, however, we did not live up to our own standards,” Louise Pentland, PayPal’s new general counsel, said in a blog post Monday.

    An Update to Our User Agreement http://t.co/qZHA2VW7rd
    — PayPal (@PayPal) June 29, 2015

    In what she said was an attempt to “clarify” matters, Pentland said PayPal won’t use “autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent.” And you can opt out without having to quit the company, she said.

    New York Attorney General Eric Schneiderman, who’d flatly called the policy illegal, commended the company for “doing the right thing” while claiming credit for the switch:

    “Again and again, Americans have demanded that companies stop invasive robocalling to promote their products,” he said. “Today, PayPal, which immediately cooperated with my office’s inquiry, announced that unless a consumer explicitly consents, it will not robocall for marketing purposes.”

    Comment by JJ — July 1, 2015 @ 7:34 pm

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