Paul Tassin  |  April 28, 2016

Category: Consumer News

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PayPal class action settlementA new class action lawsuit accuses PayPal of tricking customers into consenting to unwanted cellphone calls.

Plaintiff Scott W. says PayPal lures customers into submitting their cellphone numbers by sending them false notices of “unusual activity” on their PayPal accounts. The company later makes unwanted cellphone calls to those numbers using an automated outgoing message, he claims.

He believes these communications by PayPal violate the federal Telephone Consumer Protection Act, or TCPA.

Scott says in February 2015 he received an email from PayPal asking him to resolve a problem with his account and that use of his account would be limited until he did so. Scott says he followed PayPal’s instructions for resolving the problem, only to find out that there was no actual problem with his account.

In the course of following those instructions, PayPal prompted Scott to confirm his identity either by text message, automated phone call, or uploading proof of identity, he says. Scott says PayPal’s instructions told him that the upload method is more time consuming.

He also felt he was not in a position to refuse consent to text message or cellphone contact since PayPal had framed the issue as an urgent case of possible identity theft, he says.

Scott chose the text message option. He received a security code that he used to gain full access to his PayPal account, only to find no information about any actual “unusual activity” on the account, he says.

Later, however, Scott says he received two unwanted cellphone calls that used automated messages to offer him credit services. He believes these calls are TCPA violations, and he believes PayPal has committed similar violations against many other customers.

Scott’s TCPA class action lawsuit seeks to represent a plaintiff class consisting of all persons who received unwanted cellphone calls or unwanted text messages from PayPal during the last four years.

This TCPA class action lawsuit is filed under case no. 5:16-CV-02040 in the U.S. District Court for the Northern District of California.

Unwanted Cellphone Calls Under the TCPA

The law Scott is invoking is a set of consumer protections enacted by Congress in 1991 in response to concerns about unwanted telemarketing phone calls.

The Federal Communications Commission is in charge of implementing rules under TCPA authority. Recent amendments to the FCC’s TCPA rules include requirements that callers obtain prior express written consent before using a robocall to contact consumers. They also require that telemarketers offer an interactive opt-out option during each robocall to allow the consumer to tell the telemarketer not to call again.

The FCC maintains the National Do Not Call Registry under TCPA authority.

Under the TCPA, consumers harassed by unwanted cellphone calls may be able to recover $500 per violation. Calls that the plaintiff can prove were made in willful or knowing violation of the TCPA may yield up to three times that amount.

PayPal has had some experience with the TCPA since before Scott filed his own claim. In October 2015 a federal appeals court upheld the dismissal of a claim that the company had violated the TCPA by sending welcome messages to new customers who provided their phone numbers when they signed up for their account.

And in June 2015 PayPal increased restrictions on its own use of robocalls under pressure from federal and state officials.

Join a Free TCPA Class Action Lawsuit Investigation

If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act.

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