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FCC Warns PayPal About Potential TCPA Violations

The Enforcement Bureau of the U.S. Federal Communications Commission (FCC) has advised the online payment service company PayPal that the terms of its recently revised user agreement are in violation of FCC regulations.

Scheduled to go into effect on July 1, 2015, the revised PayPal User Agreement requires users to “consent to receive autodialed or prerecorded calls and text messages from PayPal at any telephone number that you have provided us or that we have otherwise obtained.” Users who have supplied the company with mobile phone numbers must also consent to receive SMS or text messages on their phones.

In addition to agreeing to receive phone calls and texts related to technical or billing issues, the revised User Agreement also permits PayPay to contact users by phone or text message with solicitations for PayPal offers and promotions, or to answer surveys or questionnaires.

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In a June 11, 2015 letter to PayPal’s General Counsel, the FCC’s Enforcement Bureau advised the company that, under the provisions of the Telephone Consumer Protection Act (TCPA), it must obtain express written consent from users prior to making “any prerecorded or artificial telemarketing calls to residential phones or autodialed, prerecorded or artificial voice calls or text to wireless phones.”

In its letter to PayPal, the Enforcement Bureau also reminded the company that “FCC requirements directly prohibit requiring a consumer to consent to receive autodialed or prerecorded telemarketing or advertising calls as a condition of purchasing any property, good or service, and that the company must give consumers notice of their right to refuse to give such consent.”

Violations of these and other provisions of the TCPA could subject PayPal to financial penalties of up to $16,000 per call or text message.

Read the Enforcement Bureau’s letter to PayPal.

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