FCC and NYAG Warn PayPal: That’s Not TCPA Consent

June 16, 2015

TCPA-consentThe hits just keep on coming for PayPal, Inc. (“PayPal”). Last Thursday, two days after PayPal and eBay, Inc. (“eBay”) received a list of demands from the New York Attorney General’s office (the “NYAG”), the Federal Communications Commission (the “FCC” or “Commission”) delivered a letter to PayPal, rejecting the company’s attempt at inserting TCPA consent language in its revised User Agreement.

What important TCPA consent provisions did PayPal overlook?

PayPal, eBay and the NYAG

As this blog recently reported, the NYAG delivered letters last Tuesday to PayPal and eBay questioning the legality of the companies’ revised User Agreements.

More specifically, the NYAG targeted the agreements’ robocall consent language, which purportedly allows the companies and their respective affiliates and service providers to use autodialed calls and texts, as well as prerecorded messages, to contact customers’ telephone numbers, in addition to other numbers that eBay and PayPal might “have otherwise obtained.” The NYAG has given PayPal until this Friday to answer a series of questions related to the company’s revised User Agreement and telemarketing practices.

The FCC Rejects TCPA Consent Language

The FCC delivered its own letter to PayPal on June 11, 2015. Like the NYAG, the Commission calls into question the legitimacy of PayPal’s revised User Agreement and telemarketing practices.

After reviewing PayPal’s revised agreement, the Commission took issue with the company’s purported TCPA consent provision, which:

(1) does not give consumers notice of their right to refuse consent to the receipt of autodialed/prerecorded calls from PayPal and its affiliates/service providers;

(2) does not identify the specific telephone number(s) to which the consenting consumer gives his or her consent to be called or texted; and

(3) does not demonstrate that prior express written consent of consumers was provided.

The FCC has strongly advised PayPal to re-evaluate its telemarketing compliance practices and to “operate in the manner prescribed by the TCPA.”

Avoid PayPal’s Mistake and Comply with Telemarketing Regulations

The illegitimate TCPA consent provision in PayPal’s revised User Agreement suggests that the company was poorly advised or completely unaware of governing telemarketing laws. Companies that enter the highly regulated telemarketing space without collecting sufficient TCPA consent, and otherwise strictly complying with applicable regulations, risk substantial liability at the hands of regulators and consumers themselves.

If you need to review your telemarketing practices and procedures, or if you are facing an investigation from a regulatory agency, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Related Blog Posts:

NYAG Questions Robocall Consent Language in eBay, PayPal User Agreements

Proposed FCC Telemarketing Actions – “Most Significant Since the Do-Not-Call Registry”

Feds Crack Down on Major Telemarketing and Robocalling Campaign


David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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