Federal regulators are warning PayPal over a corporate policy that lets the company contact customers with automated text messages and robo-calls.
In a letter to the online payment firm, the Federal Communications Commission said that PayPal is subject to federal guidelines protecting consumers from unwanted calls and text messages — and that its policy risks running afoul of those rules. For every violation, the FCC could levy a $16,000 fine.
The latest version of PayPal's policy, which goes into effect July 1, "raise[s] serious concerns for the Enforcement Bureau," the FCC wrote. "PayPal's amended User Agreement does not give consumers notice of their right to refuse … calls that require consumer consent."
PayPal's policy on robo-calling sparked an uproar last week when it rolled out. The company's user agreement automatically opts customers into receiving the calls and text messages, but does not appear to give consumers a way to opt out other than to leave the service.
A PayPal blog post later clarified that the firm has "no intention of harassing you" and that consumers can opt out of the calls by writing to customer support.
But that might not be good enough for the FCC, which says no company can force consumers into agreeing to receive telemarketing calls in exchange for a service. Although users may be able to opt out of getting robo-calls from PayPal after they've consented to the new user agreement, that won't change the fact that they're still required to agree to getting robo-calls in order to use PayPal at all.
"We have received a letter from the FCC and look forward to responding," PayPal said in a statement. "We strive to be as clear as possible with our customers and clarified our policies and practices last week on the PayPal blog."