PayPal Tells Feds Users Can Now Opt Out of Robo-Texting

PayPal has backed down on its robocalling and robo-texting policy.

The online money company sent a letter to the Federal Communications Commission on Monday saying it will change its terms of service to clarify when it will use automated calls or texts, and offer an easy way for users to opt out of them.

The change comes just days before the policy was to take effect as PayPal formally splits from eBay.

Earlier this month, I wrote a story calling attention to PayPal’s upcoming terms of service, in which the company granted itself broad rights to robocall or robo-text consumers for almost any reason, at any telephone number the firm could connect to a user.

The new policy is much more specific. Gone is the “at any telephone number that you have provided us or that we have otherwise obtained” language. Also gone is language saying use of the service grants PayPal the right to use texts or calls to market products to consumers.

The new policy indicates PayPal can use autodialers in three specific situations: to contact consumers to collect a debt, to investigate fraud or to provide notices about account activity. The policy then makes clear that “you do not have to consent to receive autodialed or prerecorded message calls or texts in order to use and enjoy PayPal’s products and services,” and provides an opt-out link.

The notice also makes clear that PayPal can only use automated tools for marketing purposes if it obtains additional express written consent.

“I commend PayPal for taking steps to honor consumer choices to be free from unwanted calls and texts,” said Federal Communications Commission Enforcement Bureau Chief Travis LeBlanc. “The changes to PayPal’s user agreement recognize that its customers are not required to consent to unwanted robocalls or robotexts. It clarifies, rightly, that its customers must provide prior express written consent before the company can call or text them with marketing, and that these customers have a right to revoke their consent to receive robocalls or robotexts at any time. These changes, along with PayPal’s commitments to improve its disclosures and make it easier for consumers to express their calling preferences, are significant and welcome improvements.”

After my initial story, the FCC sent a letter telling PayPal that its terms “raised serious concerns,” and would potentially violate the Telephone Consumer Protection Act. An FCC official met with PayPal’s legal team last week, which led to the change.

“We greatly appreciated the opportunity to share with you … our sincere regret for any concern or confusion this updated provision has caused the (FCC) or our customers,” the letter said. It was signed by Louis Pentland, PayPal’s general counsel.

A notice about the change will be emailed to PayPal users soon, the letter said.

In reaction to the initial report about the change, PayPal said consumers could opt out of robocalls and texts, but it wasn’t initially clear how to do so. Also, the firm had told a customer weeks earlier that no opt out was available. When PayPal consumer Robert Pascarella questioned PayPal about the terms of service on the company’s Facebook page recently, he requested an opt-out for the provision and was shot down.

“Regrettably, there isn’t an opt-out option to certain items within our User Agreement,” PayPal wrote on Facebook.

Thanks again to Ed Hasbrouck for initially calling attention to the issue …. several years ago.