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eBay and Paypal Revise Their User Agreements, and Hit a Nerve

eBay and Paypal Revise Their User Agreements, and Hit a Nerve

By David Streitfeld, The New York Times | Updated: 11 June 2015 14:37 IST

eBay wants to celebrate its forthcoming spinoff of PayPal by calling people up and trying to sell them something.

The auction site's updated user agreement says it may contact its 157 million buyers to "collect a debt" or "poll your opinions through surveys or questionnaires" or "contact you with offers and promotions."

In the agreement, scheduled to take effect Monday, eBay says it will call or text users "at any telephone number that you have provided us" or that "we have otherwise obtained."

PayPal, the online payments firm that eBay will be spinning off in the third quarter, also has an updated user agreement that says exactly the same thing. PayPal has 165 million registered users. Its new agreement takes effect on July 1.

Neither agreement is sitting well with New York law enforcement officials, which wrote the companies' general counsels this week that the new policy "raises issues" under consumer protection laws.

Among the questions the letters asked the companies to answer: How can a customer consent to being robo called on a telephone number if he or she did not provide the number in the first place? And just how can you opt out of this?

"Consumer choice and privacy preferences are protected by state and federal laws - including laws that specifically aim to stop companies from using invasive robocalls to promote products to consumers who do not wish to receive them," Melissa Grace, spokeswoman for Eric T. Schneiderman, the New York attorney general, said in a statement. "The attorney general's office will seek to stop unlawful breaches of privacy and enforce the rules that protect consumers."

Spokeswomen for the companies issued statements saying they had received the letters of inquiry and looked forward to responding to them. PayPal added that it had clarified its policies last week in a blog post when reports about the new agreements first began to cause "some confusion and concern."

"We value our relationship with you and have no intention of harassing you," Louise Pentland, PayPal's general counsel, wrote in the blog post. "Our contacts with you are intended to benefit our relationship."

The post mentioned fraudulent activity as a reason PayPal might be calling. It did not explain the inclusion of sales offers or polling.

The letters, written by Kathleen McGee, chief of the attorney general's Internet Bureau, said the only way for users to opt out of the possibility of marketing calls or text messages was to stop using the auction site or payment processor entirely.

McGee wrote, "It is unclear whether consumers really have a choice at all."

Under the PayPal agreement, if a customer calls the company, it can then harvest that number and use it for marketing. PayPal's old agreement was more restrained, merely noting the company "won't share your phone number with nonaffiliated third parties for their purposes."

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