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PayPal makes changes to user agreement after robocall controversy

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PayPal is modifying its new user agreement (set to go into effect this week) to "clarify" some terms that initially angered both customers and US lawmakers. Earlier this month, it appeared the new agreement would give PayPal full freedom to pester customers with "autodialed or prerecorded calls and text messages" directed at phone numbers registered to their account — and even numbers "otherwise obtained" outside the account setup process. The major concern was that PayPal would use these communications for unwanted advertising and sales calls. Such a move would obviously anger customers, but it would also put the company at odds with the FCC, which has put a huge focus on combatting spam calls and texts in recent years.

Now, PayPal is admitting that it "used language that did not clearly communicate how we intend to contact" customers. The tweaked user agreement now says the company "primarily" uses prerecorded robocalls for the same purposes as most banks: they're a tool to help mitigate fraud, keep customers aware of account activity, and collect any lingering debts still owed to PayPal. The new terms also emphasize that customers have the option of opting out of robocalls entirely while continuing to use PayPal's services.

  • We 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 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 says it's working closely with regulators "to clarify that our focus is on our customers, on consumer protection and on doing the right thing." The FCC found serious problems with the user agreement as it was written earlier this month, and wrote PayPal a letter expressing concern that it "may violate federal laws governing the use of autodialed, prerecorded, and artificial voice calls, including text messages."

Travis LeBlanc, the FCC enforcement officer who wrote that first letter, appears pleased with the updated document. "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," he said in a statement. PayPal's updated user agreement is still set to take effect on July 1st.