The lessons of listening

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Is the sky blue? Is the Pope Catholic? A July 14th closing letter the FTC staff sent to PayPal addresses another one of those questions with an obvious answer: Are consumers likely to get riled when told that by using a service they’ve “agreed” to receive unsolicited marketing robocalls and text messages?

The staff letter concerns a provision that PayPal planned to include in its User Agreement. Here’s the language that caused many customers to feel substantially less palsy toward PayPal – and attracted the attention of the FTC:

1.10  Calls to You; Mobile Telephone Numbers. You 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. We may place such calls or texts to (i) notify you regarding your account; (ii) troubleshoot problems with your account (iii) resolve a dispute; (iv) collect a debt; (v) poll your opinions through surveys or questionnaires, (vii) contact you with offers and promotions; or (viii) as otherwise necessary to service your account or enforce this User Agreement, our policies, applicable law, or any other agreement we may have with you.

Practically speaking, here’s the choice the company initially offered its customers: Agree to receive robocalls and texts anytime PayPal wants to pitch you something or don’t use PayPal.

Not so fast, said the FTC staff. Calls “with offers and promotions” fall squarely within the definition of telemarketing calls under the Telemarketing Sales Rule – and telemarketing calls are limited by a little something called the National Do Not Call Registry. Although the TSR includes an exception if consumers give their express written consent to get those calls, burying language in a User Agreement doesn’t meet the TSR’s high standard. What’s more, PayPal said its affiliates and service providers would be able to call, too. That would run afoul of the TSR’s requirement that written consent extends only to a “specific party,” and not to unnamed others.

The staff letter also reminded PayPal that telemarketing robocalls are illegal under the TSR – even if placed to a number that isn't on the Do Not Call Registry – unless the company has the consumer’s express written consent to receive them. The staff noted that any purported consent in this instance would be invalid since it’s illegal to require consumers to receive telemarketing robocalls as a condition of using a service.

PayPal initially said the provision would go into effect on July 1, 2015. Many PayPal customers responded with – to put it mildly – displeasure. The company mulled it over and announced a revised policy on June 29th that limited its use of robocalls or texts to “provide notices regarding your Account or Account Activity,” to investigate or prevent fraud, or for debt collection. Furthermore, the company stated, "We and our service providers will not use autodialed or prerecorded message calls or texts to contact you for marketing purposes at the telephone numbers(s) you designate unless we receive your prior express written consent." It also made it clear that “You do not have to consent to receive autodialed or prerecorded message calls or texts in order to use and enjoy PayPal’s products and services.”

The FTC staff cited two reasons for its decision to close the investigation of PayPal: “First, the revised language appears to address the TSR issues identified above. Second, because this new language was implemented prior to the July 1, 2015, effective date, it does not appear that Pay Pal made any telemarketing calls to customers on the basis of the original proposed version of Section 1.10 of the User Agreement.”

Of course, the staff letter makes clear that people shouldn’t interpret it as an FTC determination that PayPal did – or didn’t – violate the TSR. Furthermore, the FTC “reserves the right to take further action as the public interest may warrant.” Even so, the closing letter offers some practical insights for other companies:

  • The TSR includes clear dos and don’ts for business. Time for a refresher? Complying with the Telemarketing Sales Rule is a good place to start. The Business Center's Telemarketing page includes more resources.
  • If you need to disclose information clearly and conspicuously to consumers, the User Agreement may not be the best place to accomplish that. Furthermore, if a rule or law requires a consumer’s “express written consent,” it’s unwise to rely on a routine I AGREE click appended to a long User Agreement.
  • PayPal’s course correction illustrates the wisdom of listening to consumers. It’s never pleasant to receive complaints, but savvy businesses learn from what loyal customers are telling them.



I use PayPal largely because it affords a bit more anonymity. I will NOT use it or anything else if I find my privacy impacted in any way. Thank you for bringing this to my attention.

I am receiving 20-30 robo calls per day. It has gotten so bad that I have cancelled voicemail on my cell phone. The next step is to get a new phone & number that has never been published.

PayPal is a slippery outfit that does its best to separate its users from their money. That is bad enough the telemarketing policy you just thwarted was as bad if not worse than the company's financial dealings. Bravo, FTC, and thanks for looking out for consumer interests.

Now Robo calls and telemarketers use real area codes. Example, 714. I have friends in that area code. So I don't know now when I pick up the phone if it's a friend, telemarketer or Robo caller. But I know for sure I am getting way too many and it's really annoying, intrusive, and invasion of my privacy; let along agains the law.

well I think these people out here be doing stuff to other and I think these not good

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