FCC warns Paypal that policy might violate law

FCC warns Paypal that policy might violate law
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Paypal has come under fire again from federal regulators, this time over its new robocall policy. 

The Federal Communications Commission’s enforcement bureau sent a warning to the payment processing company Thursday that its terms of service slated to take effect next month might violate the law.

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As a condition of signing the users agreement, Paypal customers would be giving their consent to receive robocalls and texts from the company on any number it obtains.

“We are concerned that these amendments may violate federal laws governing the use of autodialed, prerecorded, and artificial voice calls, including text messages,” FCC Enforcement Bureau Chief Travis LeBlanc wrote in the letter to the company. 

The FCC said it prohibits companies from requiring robocall consent as a condition of purchasing a product or service. It also requires companies to notify customers of their right to refuse. 

The agency also noted that consent must be based on specific phone numbers. Paypal’s terms say it can make robocalls to “any telephone number that you have provided us or that we have otherwise obtained” appears overly broad, according to the FCC. 

Paypal’s new terms of service were uncovered earlier this month in a report from The Washington Post. The FCC is highlighting the issue ahead of a scheduled vote next week that would, among other things, make it easier for customers to opt out of those kind of calls or rescind their previous consent. 

Last month, the Consumer Financial Protection Bureau forced the company to hand over $25 million over allegations it illegally enrolled customers in its credit payment plan.

At the time, the agency leveled a number of charges, including that the company set users’ payment option to credit by default and that it mishandled billing disputes.