Two-year-old MTailor has garnered millions in sales for its custom-made shirts, all via its app.
The FCC requires marketers to gain written consent before sending mobile messages.
Beginning Oct. 16, mobile marketers may be reaching for the aspirin bottle a bit more frequently. On that day, the Federal Communications Commission will begin enforcing a stricter set of rules surrounding marketing calls and texts to consumers’ mobile phones, requiring marketers to obtain written consent from a consumer before signing her up for any mobile marketing campaigns.
“This is quite a change from prior rules which merely required consent, either express or implied, and either oral or written,” David S. Almeida, a partner in the Business Trial Practice Group in the Chicago office of law firm Sheppard Mullin Richter & Hampton LLP, writes in an e-mail containing a client alert on the rule changes.
Retailers and brands that do not collect written approval risk being named in class-action lawsuits arguing they aren’t in compliance with the Telephone Consumer Protection Act, or TCPA.
TCPA, Almeida says, is the current flavor of the month for plaintiffs’ class-action lawyers because the statute allows plaintiffs to collect up to $1,500 per call or text and also allows plaintiffs to aggregate individual claims into class-action lawsuits.
The Telephone Consumer Protection Act—a law passed in 1991 to curb excessive telemarketing practices–originally did not cover mobile marketing via text message. The law was originally designed to halt the abusive practices of the more than 30,000 businesses that actively telemarketed goods and services to businesses and residential customers, Almeida says. Congress at the time found that more than 300,000 solicitors called more than 18 million homes and businesses every day, and that many consumers were outraged over the proliferation of intrusive nuisance calls.
However, in 2009 TCPA was judicially expanded to include texts, and consumers have recently filed hundreds of class-action lawsuits under the law citing unwanted texts and violation of privacy. Companies named in TCPA lawsuits include Wal-Mart Stores Inc., Papa John’s, Pizza Hut and Taco Bell.
Until this forthcoming rule change, the FCC required what it called clear disclosure and consent or opt-in by the consumer to receive such mobile marketing messages. That was often a muddy definition in court. Courts waffled on what consent was, with some courts, including one in a case against Wal-Mart, finding that consumers had expressed consent if they provided their phone number, and others, such as a case against collection company CCS Commercial, ruling providing a number was not consent. The FCC’s updated definition of consent is an attempt to provide clarity, Almeida writes.
The FCC’s new interpretation now requires a prior, signed written agreement, specifically agreeing to receive telemarketing calls or text messages via auto-dialer and/or pre-recorded voice. Retailers and marketers can obtain the written consent in person, for example, by collecting a consumers signature, or electronically.
Written, however, can be a bit misleading as some examples of satisfactory consent include obtaining a confirmation e-mail from a consumer, having the consumer send a text message to the marketer confirming consent and requiring consumers to press a button in response to a telephonic voice-over prompt.
If a dispute concerning consent arises, the sender, as before, still bears the burden of proof to demonstrate that a “clear and conspicuous” consent was provided.
Almeida says one positive for defendants is that the new regulations will enable them to document and provide clear evidence of consent, which has historically been a minefield for TCPA defendants. He suggests brands and retailers keep each consumer’s written consent on file for at least four years (the federal statute of limitations to bring an action under TCPA) beyond the last call or text they send to a consumer.
Almeida also points out that retailers and brands need to require the consumer to manually provide the written consent—for example, clicking a box, signing her name, or writing her signature. A hybrid approach where a cashier asks for consent of a customer and then documents it behind the counter, is not considered legal consent under the rule change, he says. “Marketers face a plausible risk of facing a TCPA lawsuit if they move ahead with campaigns relying on consumers’ oral consent, even if documented by the company’s employees,” he writes.
Almeida gives the following recommendations to text message marketers seeking to comply with the new rules:
Don’t make calls or send texts to new consumers asking for initial written consent: While the E-SIGN Act makes it legal for retailers and marketers to obtain the required consent electronically, if the marketer relies on text messages to obtain original written consent, the consumer must send the first text to indicate her consent. A marketer can post a sign in a store with the number to sign up for text messages but the store cannot send a text message that asks the consumer to agree to receive such messages, because strictly speaking this would be an unsolicited communication, Almeida writes.
Send text messages requesting electronic consent to those consumers who have already opted in to receive text messages before Oct. 16: These confirmation texts should require the consumer to respond to such texts to make sure that the written consent requirement is fulfilled.
Enable consumers to opt out: Even if a consumer provides express written consent to receive telemarketing messages, the consumer must be able to revoke such consent at any time. Therefore, make sure that each call or text message contains information telling the consumer how to opt out.
Ensure the consumer is the one providing written consent: The new rules mandate that whatever the medium through which written consent is obtained, it must be the consumer—no one else—who provides the consent.
While the new rules require more work for mobile marketers to remain in compliance with FCC regulations, they do provide clarity around consumer consent to receive mobile messages, which could help businesses argue their case in court, Almeida says.