PayPal’s user agreement headache just won’t go away. Following a week in which the company tried to address criticisms of its new user agreement, the company is now facing warnings from the FCC (America’s Federal Communications Commission) that the agreement could be breaking the law.
The trouble revolves around the fact that PayPal’s new user agreement compels users to consent to receive robocalls from the company and its affiliates. That prompted an outcry, which in turn compelled PayPal to slightly modify that agreement and to allow users to opt out of receiving robocalls by contacting the company’s customer service department.
Unfortunately for PayPal, the FCC isn’t satisfied with those measures. Basically, there are two issues: one, PayPal can’t legally make consenting to robocalls a condition of its service agreement; and two, the company can’t just start sending robocalls without first getting written consent and letting recipients specify the phone number to be used for these calls, in addition to providing a means of opting out. In its letter sent last Thursday, the FCC advised PayPal that it could face fines of up to $16,000 per robocall.
It’s an ugly PR mess for the company to endure as it attempts to position itself in the mobile payment market and refine its brand as it prepares to break off from parent company eBay. But the FCC warning gives PayPal an opportunity to make things right before the mess gets much messier, and no doubt the company will be eager to settle this as soon as possible.