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Class Actions

Is Text Marketing Your Recipe for Success Or Your Company’s Downfall?

Text-marketing (or SMS marketing) can be an essential tool for many small businesses. For a small price, any company can send bulk messages to hundreds of phone numbers of existing and potential customers. But, it is important to remember that text-marketing subjects your company to potential litigation under the Telephone Consumer Protection Act (TCPA) if your company’s text is not in compliance.  TCPA litigation can cost companies, both big and small, millions of dollars in liability based on one not well-thought-out text message. Take Papa John’s, who settled a TCPA lawsuit for over $16 million after purportedly sending over 500,000 text messages to customers after they ordered pizza. And, Jiffy Lube, who settled a TCPA lawsuit for $47 million after its franchisees allegedly sent unsolicited text messages advertising a “1 time offer” on an oil change to phone numbers pulled from customer invoices.

The TCPA prohibits the use of automatic telephone dialing systems (ATDS) or “auto-dialer” to contact consumers on their mobile phones, without the consumers’ express consent – this includes text messages. Failure to comply with the TCPA could result in statutory fines of at least $500 for every text sent to a consumer.  To protect against this potential liability:–

First, make sure your company has express written consent before sending any text. One way to get consent would be to have a customer consent to text messaging by texting a keyword to a short code number. Your business can promote this keyword in advertisements, emails, or other messaging (just not in a text!) Also, a customer can consent to receiving texts through a website form or landing page. But, it is important to remember that simply because a customer provides his or her phone number, that does not mean he or she has consented to receiving text messages.  Spell it out!

Second, after getting consent, send a confirmation text to the recipient giving them the option to opt-out from receiving future text messages.  The confirmation text should contain your business name, a description of the types of message the recipient will receive (offers, coupons, etc.), that text messaging rates may apply, and how to opt-out from receiving texts in the future (example: “Text STOP to cancel.”)

Third, seek legal advice.  If your company is using text-messaging to market, consult an attorney before you send the first text.  The TCPA regulatory mandates are constantly changing and are very technical.  To prevent financial exposure to your company, it is imperative for businesses to work with counsel prior to engaging in any text message marketing campaign. And, If your business has hired an outside firm to conduct your advertising and marketing, make sure that company is complying with the TCPA and other regulations.  Your company can be held liable for violations committed by a telemarketing firm working on your company’s behalf. The responsibility for ensuring and maintaining compliance is with the company that commissions the third party. Your business cannot contract away compliance responsibilities.

Originally published in Florida Restaurant & Lodging, Winter 2019, The official publication of the Florida Restaurant & Lodging Association. Republished with permission.

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