In the last few weeks PayPal has been in the news about its new policy going into effect July 1st. What’s causing the commotion? The question involves using auto dialed or prerecorded calls and text messages to call not only the phone number given directly to PayPal, but to “any telephone number that we have otherwise obtained.” Additionally, PayPal reserves the right to contact customers for surveys and promotions in addition to account-related issues. The user agreement is mandatory; there is no opt-in, only an unclear method of opting out.
PayPal’s suggestion for customers who did not like the new terms was, “Close Your Account Before July 1st 2015.”
After PayPal received bad press, they claimed customers could opt out of certain options by calling their toll free number. However, when customers first started dialing in, they were directed instead to close their account. Apparently, PayPal reps didn’t get the official memo.
The FCC is now getting involved stating the new user agreement “may violate federal laws governing the use of autodialed, prerecorded and artificial voice calls, including text messages.” The FCC notes that the agreement may run afoul of the Telephone Consumer Protection Act.
So, that’s the issue. What exactly is PayPal’s thinking? It is obvious to me their new policy doesn’t make sense. Customers are the most important asset of any company and why would PayPal nonchalantly tell customers to close their accounts and do business elsewhere. PayPal used to be the only game in town, but now has competition. Stripe and Square, similar entities are backed by former executives of PayPal and of course there is Apple Pay.
I really don’t understand. Even the opt-out provision creates an unnecessary burden and is contrary to FCC regulations. According to the FCC PayPal must first obtain prior express written consent from any and all participants in order to make any kind of prerecorded call. The FCC also goes on to say that the company cannot make signing such an agreement a “condition of purchasing any property, goods or services.”
PayPal’s biggest defense is that this policy is not new. Customers are just figuring it out, which means they may have been violating the Telephone Consumer Protection Act for some time. That doesn’t sound like a valid excuse.
Personally, I’m not PayPal subscriber. Many years ago I was an avid EBAY trader, collecting memorabilia related to the companies we represent. I thought that PayPal was a novel idea. It was a great way for buyers and sellers to exchange money through a third party. However, now when I purchase on the Internet and there is an option to pay by credit card or PayPal, I select the former. I know if there is an issue with a credit card company, I can call and generally speak to a friendly and knowledgeable representative who listens to my concerns and can solve any problem.
Credit card companies have become very customer-focused. PayPal should follow their example. Perhaps putting customers on their Board of Directors would point them in a better direction. Certainly telling your customers to close their accounts is not a good way to do business.
What do you think?