WASHINGTON, D.C. -- U.S. Senator Robert Menendez (D-NJ) today joined Senators Edward J. Markey (D-Mass.), Al Franken (D-Minn.), and Ron Wyden (D-Ore.) in calling on PayPal, the global online payments system company, to change its recently released new User Agreement that would require consumers to consent to receive autodialed or prerecorded calls and text messages. Consumers cannot opt out of these new terms, which go into effect on July 1, 2015, without also forfeiting their ability to use PayPal services.

“No consumer should be forced to accept annoying, intrusive, and sometimes predatory robocalls as a condition of using a product,” said Sen. Menendez.  “The principles behind the ‘Do Not Call’ list remains as important today as they were was ten years ago, and companies should not try to get around them with mandatory contract clauses.”

In a letter to PayPal CEO Dan Schulman, the Senators explained how their new policy could harm consumers by forcing them to receive a flood of unwanted and intrusive calls. Under the Telephone Consumer Protection Act (TCPA), companies can robocall a consumer’s phone number only after obtaining consumer consent, and consumers have the right to revoke their consent and stop receiving unwanted calls without also terminating requested services from a company. PayPal has received a communication from the Enforcement Bureau of the Federal Communications Commission (FCC) outlining TCPA compliance requirements, including the requirement that the use of a service cannot be conditioned on consent to receive robocalls that fall under the TCPA.

Senator Menendez previously authored a successful amendment to the budget resolution to strengthen the “Do Not Call Registry” through stiffer penalties and stepped up enforcement. He also cosigned Sen. Markey’s letter to the FCC urging them not to weaken rules prohibiting certain robocalls.

Full text of the letter below:

Dear Mr. Schulman,

We are writing to you with concerns regarding recent changes to PayPal’s User Agreement. According to the story in The Washington Post, (“A horrible new PayPal policy opts you into getting robocalls, June 3, 2015), PayPal “is rolling out an update to its user agreement that threatens to bombard you with ‘autodialed or prerecorded calls and text messages’ – and worse, by agreeing to the updated terms, you’re immediately opted in.”  The User Agreement explains that consumers cannot opt out of these new terms without also forfeiting their ability to use PayPal services.  This new policy could adversely affect consumers by exposing them to a barrage of unwanted calls that are unstoppable unless consumers choose to discontinue using PayPal.

For more than two decades, consumers have benefited from the privacy protections provided by Telephone Consumer Protection Act (TCPA).  The law has prevented unsolicited and intrusive robocalls to consumers at home or on their mobile phones.  While companies do have the option to robocall a consumer’s phone number after they obtain consumer consent, consumers have the right, including when they sign-up for any service including PayPal, to decline to receiving unwanted calls.

We understand that PayPal has received a communication from the Enforcement Bureau of the Federal Communications Commission (FCC) outlining TCPA compliance requirements, including the requirement that the use of a service cannot be conditioned on consent to receive robocalls that fall under the TCPA.  We share the FCC’s perspective and believe consumers should not have to agree to submit themselves to intrusive robocalls in order to use a company’s service. 

Thank you for your attention to this important issue.  Please respond in writing by July 7, 2015, about whether PayPal is reexamining its User Agreement, and if the company is undertaking this reexamination, the ways the agreement will be altered to address these concerns.  Should you have any further questions please contact Joseph Wender or Grace Ogilby of my staff at (202) 224-2742.