The perils of marketing by text message
December 6, 2012
Consumers today face a constant barrage of advertising and promotional material, whether from their computer screens, bus stop benches, radios, televisions or even restroom walls.
You or your clients may be considering ways to stand out from the crowd, including reaching consumers directly by text message to market products or services.
However, while hitting “send” to generate sales may sound tempting, the legal implications of conducting marketing campaigns by text message can be serious — and costly.
Marketing communications via text message are subject to two separate federal laws: the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (popularly known as the “CAN-SPAM Act”) and the Telephone Consumer Protection Act (the “TCPA”). Each of these laws can carry significant penalties.
In addition to these federal laws, text message marketing may implicate federal and state consumer protection laws, which prohibit unfair and deceptive business practices.
The TCPA generally disallows sending commercial text messages through an auto-dialer (as many marketing text messages are administered) unless the consumer has given prior express written consent to receive such messages.
If challenged, then the sender bears the burden of proving that it has obtained prior express consent.
It is not only critical to obtain consent, but also to maintain accurate records. Consumers bringing suit under the TCPA can obtain damages of up to $1,500 per sent message — for example, if a message went to 1,000 individuals, then the sender might be subjected to penalties of up to $1.5 million. Because marketing text messages often go to thousands, or even millions, of consumers at once, the potential damages for TCPA violations can be astronomical.
The CAN-SPAM Act
The CAN-SPAM Act, on the other hand, primarily applies to unwanted commercial emails (“spam”), but can also apply to marketing text messages because, often, those texts are generated by email. The CAN-SPAM Act requires that certain elements, such as a clear identification of the sender, an opt-out option and a legitimate return email address appear in each marketing communication.
If a consumer opts out of receiving messages, then the sender must cease sending communications to that person within 10 days. As with the TCPA, CAN-SPAM allows sending marketing communications to those who have given express prior authorization. Regulations under the Act make clear that the consumer’s express prior authorization must clearly identify who will be sending the messages. Fines under the CAN-SPAM Act can reach up to $16,000 per message.
As text message marketing has become more widespread, this area has proven to be fertile ground for consumer lawsuits. A number of prominent companies have recently found themselves in hot water regarding their texting practices.
Earlier this year, a class action lawsuit brought under the TCPA against a major Jiffy Lube franchisee reportedly settled for $47 million. Papa John’s, Dell, Inc., and The Coca-Cola Company have faced, or are currently facing, similar claims.
As the stakes in this area can be extraordinarily high, if you or your clients are considering a campaign that incorporates text message marketing, it pays to consult an attorney early in the process.
Bob Felber leads the Intellectual Property Practice Group at Waller Lansden in Nashville, Tenn. For more than 25 years, he has counseled clients on IP matters with an emphasis in the areas of domestic and international brand clearance and protection, domain name disputes, product distribution and franchising.
Email: Bob.Felber at wallerlaw.com