PayPal’s New T&Cs Raises Concerns for Regulators and Investors

by Tim Sloane 0

This article in Tech Times indicates that new T&Cs require consumers either agree to let PayPal robocall them or close their PayPal account. This is probably not the option investors would like consumers to make:

“The new user agreement, which would take effect on July 1, has been released in advance to be read by concerned parties.
This updated user agreement is not an opt-in type of deal, so if the customer agrees, PayPal is allowed to contact the user for purposes such as account notification, dispute resolution, debt collection, surveys or promotions. However, if the customer chooses not to accept the terms, the user is allowed 30 days to close the account and thus would not be bound by the amended terms.
The service agreement can be fully read on PayPal’s official website, but many experts have pointed out that some phrases are vague in definition and might be illegal under the established rules of the Telephone Consumer Protection Act and Fair Debt Collection Practices Act.
Examples of vague phrases include “we have otherwise obtained” and “share your phone numbers with our Affiliates or with our service providers,” as PayPal could be providing debt collectors with inaccurate phone numbers since the number was not directly provided by the customer. Concerns are that PayPal could mistakenly provide a work phone number or a family member’s number to debt collectors, which is prohibited unless the third party consents.”

As PayPal prepares to separate from eBay it will face significant scrutiny from investors, and even if PayPal never intended to robocall its customers willy-nilly this article clearly suggests that the door is left wide open and the only way to opt out is to leave PayPal – likely to be a harsh option for potential investors.

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

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