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PayPal Backs Down on Controversial New Robocall Policy

PayPal reversed course Monday on a controversial new policy that would have automatically "opted in" its users to receive robocalls and text messages from the company.

The online payments company angered users, lawmakers and federal regulators on June 11 when it said it would begin contacting customers with "autodialed or prerecorded calls and text messages" even if they hadn't given PayPal permission — and even if they never gave PayPal their phone numbers at all.

The only recourse for PayPal's 165 million registered users against the policy — which was scheduled to go into effect Wednesday — would have been to stop using PayPal.

Consumer activists and the Federal Communications Commission objected, and after meeting with the chief of the FCC's enforcement bureau, PayPal relented on Monday.

"We value our relationship with our customers and work hard to communicate clearly. Recently, however, we did not live up to our own standards," Louise Pentland, PayPal's new general counsel, said in a blog post Monday.

In what she said was an attempt to "clarify" matters, Pentland said PayPal won't use "autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent." And you can opt out without having to quit the company, she said.

New York Attorney General Eric Schneiderman, who'd flatly called the policy illegal, commended the company for "doing the right thing" while claiming credit for the switch:

"Again and again, Americans have demanded that companies stop invasive robocalling to promote their products," he said. "Today, PayPal, which immediately cooperated with my office’s inquiry, announced that unless a consumer explicitly consents, it will not robocall for marketing purposes."