Sunday, 21 June 2015

FCC finally takes note of robocall/SMS terms of service -- 6 years late

Six years ago, American Express changed its terms of service to require cardholders to give AmEx permission to robocall or text-message them "at any telephone number " you provide to us or from which you place a call to us, or any telephone number at which we reasonably believe we may reach you."

When I declined to agree to these proposed new terms, AmEx cancelled my card and closed the account I had held with them for twenty years. Despite some publicity including a story in the New York Times prompted by my initial article, the story failed to get traction, and the new AmEx terms of service went into effect.

Other companies adopted similar terms of service, including almost all of the largest credit-card issuers. I reported on similar terms of service for eBay and PayPal (then part of the same company) in 2012.

Fast forward a few years to the present, and eBay's impending spinoff of Paypal as (once again) a separate company has drawn renewed scrutiny to PayPal's terms of service.

A story earlier this month by Bob Sullivan on Credit.com, citing my earlier reports, finally got the attention first of more consumer advocates and then of the FCC. In response, the head of the FCC's enforcement bureau has sent a letter to PayPal stating that:

FCC requirements directly prohibit requiring a consumer to consent to receive autodialed or prerecorded telemarketing or advertising calls as a condition of purchasing any property, good, or service, and the company must give consumers notice of their right to refuse to give such consent. PayPal's amended User Agreement does not give consumers notice of their right to refuse consent to calls that require consumer consent from PayPal, its affiliates, and its service providers. If PayPal fails to include this required notice and/or fails to allow its users to refuse such consent, we are concerned that consent is in fact a condition of purchase of PayPal"s service and thus violates the Telephone Consumer Protection Act and could subject PayPal, its affiliates, and its service providers to penalties of up to $16,000 per call or text message.

Second, we direct your attention to the requirement that the written agreement must identify the specific telephone number(s) to which the consenting consumer gives his or her consent to be called or texted. A blanket User Agreement that purports to apply to 'any telephone number that [consumers] have provided us or that we have otherwise obtained' does not meet the level of specificity required by law. Many consumers have more than one telephone line. Consumers have the right to choose on which line(s) they wish to receive telemarketing or advertising calls, if they elect to receive such calls at all.

Finally, the Commission has ruled that should any question about the consent arise, the seller will bear the burden of demonstrating that a clear and conspicuous disclosure was provided and that unambiguous consent was obtained. We direct your attention to this statement because it underscores the importance of complying with federal law when structuring your agreements to collect the prior express written consent of consumers.

All well and good, if a few years too late. The real question will be whether the FCC follows up with similar letters to the other companies, including all of the major credit card issuers, with similar terms of service, and what enforcement action the FCC takes against those companies that have been enforcing such terms of service, placing robocalls, and sending text messages on the basis of these terms for years.

I'm working on a series of requests to "opt out" of any consent to robocalling or text messaging that may have been deemed to have been implied by my use of credit cards or other services such as eBay and PayPal with terms of service like this. It may take a few months, but I'll let you know how it goes.

[Update: Bob Sullivan reports that PayPal has responded to the FCC by changing its terms of service and adding an "opt-out" link for robocalls and SMS spam. That still leaves unanswered what, if any, action will be taken by the FCC against other companies with similar terms.]

Link | Posted by Edward on Sunday, 21 June 2015, 08:20 ( 8:20 AM) | TrackBack (0)
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