Ahead of their upcoming split, eBay and PayPal are updating their user agreements, and they’ve buried at least one big change in the online documents. According to terms that take effect for eBay on Monday and PayPal on July 1, the two companies have granted themselves the right to make “autodialed or prerecorded calls and text messages” to customers to “any telephone number that you have provided us or that we have otherwise obtained.” For what purposes might eBay and PayPal want to dial you? To “troubleshoot problems with your account,” “resolve a dispute,” “collect a debt,” “poll your opinions through surveys or questionnaires,” “contact you with offers and promotions,” or “as otherwise necessary to service your account.” Basically they’re leaving their options open.
Well, it turns out people aren’t too pleased with this sweeping authorization of robocalls. (Especially troubling is the part about numbers the companies have “otherwise obtained.”) In fact, the New York State Attorney General’s Office was concerned enough to inform eBay and PayPal in letters earlier this week that their autodialing practice “raises issues under the Telephone Consumer Protection Act and the Fair Debt Collections Practices Act.”
*Update, June 11, 4 p.m.: The Federal Communications Commission has added a letter of its own to the concerns. The FCC warns PayPal that changes to its user agreement “may violate federal laws governing the use of autodialed, prerecorded, and artificial voice calls,” as regulators place “strict limits on such communications.” For PayPal to make such calls, the FCC says it needs clear, signed consent from customers (which it seems fair to say hasn’t happened so far). “Given these requirements, PayPal’s recent amendments to its User Agreement raise serious concerns for the Enforcement Bureau,” the letter states. Should PayPal fail to adequately obtain consent from its users, the company could face penalties of up to $16,000 per call or text.
In a statement on its website, PayPal says customers shouldn’t fear receiving “unwanted, excessive, or expensive calls and text messages” from it. “We value our relationship with you and have no intention of harassing you,” senior vice president Louise Pentland wrote, explaining that robocalls would mainly be used to alert customers to fraud or other account service issues. PayPal customers can also choose to opt out of the calls entirely. A spokesman for PayPal pointed to the company’s online statement but declined to comment further.
The big question in this case is whether eBay and PayPal sufficiently warned customers about the changes to their user agreements—and in particular the autodialing protocol—for them to consent to it. The idea is pretty much that if eBay and PayPal tell customers this is happening, and that they can opt out if they don’t like it, the move is probably fine. But if the companies merely email consumers saying their user agreement changed and don’t point to any specifics, while also requiring them to opt out of something, regulators might not find that fair. After all, who really reads user agreements?