Monday, June 29, 2015

PayPal Backtracks on Robocalls Amidst FCC Complaints

Following recent reports that PayPal's new user agreement would allow the company to send all of its users automated (robocalls) and texts the company has today announced it’s plans to amend the User Agreement once again to clarify the language it uses to communicate to customers how the company is allowed to contact them.

PayPal had recently faced several complaints for customers and consumer advocacy groups following media reports of a change to PayPal’s terms. Rather vague language found in an update to the User Agreement, which was originally set to go live on July 1st, seemed to indicate that the company would be allowed to robocall and text users on any number it could obtain – not just the one associated with a PayPal account – and for a variety of purposes, including but not limited to marketing.

Following these reports several advocacy groups reached out the the FCC voicing their concerns. In turn this prompted the FCC to respond with a warning voicing concerns that PayPal’s updated user agreement may be in violation of federal law. One issue, according to the FCC, is that consenting to robocalls cannot be a condition of using PayPal’s service. In addition, customers must provide prior written consent before receiving robocalls, they must be able to opt out, and if they choose to consent, they must be able to specify which phone number they’re agreeing to be contacted on by PayPal.

Opting to heed the FCC's warning and avoid potential penalties of up to $16,000 per call or text message, PayPal decided to remove the vague language from the newest User Agreement and has  published a blog post apologizing to consumers for the confusion. The company says it’s now modifying the disputed section (1.10) of the User Agreement to clarify that PayPal “primarily” uses autodialed or prerecorded calls and texts for the following purposes:
  • Help detect, investigate and protect PayPal customers from fraud
  • Provide notices to  customers regarding their accounts or account activity
  • Collect a debt owed to PayPal
In addition the new Sections (1.10(a) and 1.10(b)) will make it clear that:
  •  PayPal will not use autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent
  • Customers can continue to enjoy our products and services without needing to consent to receive autodialed or prerecorded calls or texts
  • We [PayPal] respect our customers’ communications preferences and recognize that their consent is required for certain autodialed and prerecorded calls and texts. Customers may revoke consent to receive these communications by contacting PayPal customer support and informing us of their preferences.
PayPal today says it’s clarifying the agreement’s terms, which should satisfy the FCC. The company added it worked with regulators on the new language, so it’s not likely there will be further issues. In addition to post linked above, PayPal also states they will be emailing all of their customers fully detailing the new change and allowing them the chance to provide further feedback.

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