PayPal users may get break on unsolicited robocalls, texts

Critics are upset that changes to PayPal's terms of service will let it ping users in these ways for marketing purposes

PayPal's logo.

PayPal's logo.

After a backlash from critics, PayPal seems to be reconsidering a plan to give itself unilateral permission to ping its users with robocalls and text messages.

The controversy started when PayPal recently indicated in proposed amendments to its user agreement and privacy policy its intention to engage in this type of communication with its customers. There, it also stated that the only opt-out recourse for those in disagreement with its plan would be to close their accounts.

The plan drew attention from critics who, in blogs and on social media, questioned the prudence and legality of the new policy, which is slated to go into effect July 1. If the changes are adopted, PayPal would be able to make autodialed and prerecorded calls, and send text messages using any telephone number account holders have provided to PayPal or that the company has "otherwise obtained."

PayPal says it may contact users for numerous reasons, which include troubleshooting account problems, resolving disputes and collecting debts. But the calls may also be made to advertise offers and promotions, or to conduct user surveys.

Federal Communications Commission rules state that unsolicited robocalls are only legal if a company has obtained written or oral consent from consumers. In a post on financial education and services site Credit.com, syndicated columnist, book author and self-described consumer advocate Bob Sullivan questioned whether a change in PayPal's terms legally constitutes consent.

Plus, the policy, as it reads, provides no way for users to opt out, aside from closing their account.

But on Friday, a PayPal spokesman sang a different tune. Our policy is to honor customers' requests to decline to receive auto-dialed or prerecorded calls," he said.

The spokesman wouldn't say how users would be able to opt out, or when. He said the company is planning to provide more details and address this issue in a blog post, although he couldn't say when that will be published.

The new stance comes as PayPal prepares to split from parent company eBay, and establish itself as an independent publicly-traded company.

Federal regulators are also preparing to vote on new rules that would make it easier for consumers to say no to telemarketing and robocalling.

More than 10 years ago, the national Do Not Call registry was created to let consumers exclude their phone numbers from telemarketing databases. The FCC is voting on June 18 to address consumer complaints that it's still too hard to avoid marketing calls and text messages.

The FCC did not immediately respond to a request for comment on PayPal's new policy.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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Zach Miners

IDG News Service
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