FCC Warns PayPal Its New User Agreement May Violate Autodialing Law

PayPal, Inc.’s new User Agreement may violate federal laws concerning the use of autodialed, prerecorded, and artificial voice calls, the Federal Communications Commission (FCC) warned.

As of July 1, 2015, PayPal’s users must “consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided to us or that we have otherwise obtained.” In addition, users agree that if they provided a mobile telephone number, “you consent to receive SMS or text messages at that number.”

The FCC sent a letter to PayPal noting 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.” In order to send such messages, consumers must give consent with a written signature.

“PayPal’s recent amendments to its User Agreement raise serious concerns for the Enforcement Bureau,” the FCC said.

First, a consumer must consent to receive autodialed or prerecorded telemarketing or advertising calls. “PayPal’s amended User Agreement does not give consumers notice of their right to refuse consent to calls that require consumer consent from PayPal, its affiliates, and its service providers. If PayPal fails to include this required notice and/or fails to allow its users to refuse such consent,” then PayPal may be violating the Telephone Consumer Protection Act (TCPA), the letter said.

Second, the law requires that consent be given for specific telephone numbers. “A blanket User Agreement that purports to apply to ‘any telephone number that [consumers] have provided us or that we have otherwise obtained’ does not meet the level of specificity required by law. Many consumers have more than one telephone line. Consumers have the right to choose on which line(s) they wish to receive telemarketing or advertising calls, if they elect to receive such calls,” the letter said.

Violations of the TCPA provides penalties of up to $16,000 per call or text message.