PayPal clarifies its stance on controversial SMS announcement

Following backlash from the media, PayPal has clarified its position on sending unsolicited text messages and automated phone calls, offering an opt-out for customers.

It was reported last week that the online payment service would be changing its terms of use following its split from parent company eBay. This change was reported to include a clause allowing PayPal to send text messages or make phone calls to customers, with neither an official opt in or out. Media outlets, blogs and customers reacted with concern at this news, questioning the legality.

In a following blog post, the company clarified its update, stating that there had been a misunderstanding. It said that these communications are only used in to reach out to customers for account service purposes, such as in the instance that user may have been the victim of fraud. In this instance text messages or so-called robocalls may be used as they require a sense of urgency.

PayPal’s senior vice president, general counsel and company secretary Louise Pentland explains: “In reaching out to you for account service purposes, such as fraud alerts, we occasionally use technologies that allow us to contact you efficiently. To use this approach we seek your permission through our User Agreement.”

Text message and automated voice calls offer an immediacy that is ideal for urgent situations such as fraud. However, according to the Information Commissioner (ICO) rules in the UK, customers should still be able to choose the communication they receive. PayPal has now offered a method for unsubscribing should users still not wish to be contacted in this way. The new agreement will roll out on July 1.

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