By: Erin Wall

The number of companies using text messages (SMS) to market to consumers is on the rise. between 2015 and 2017, the number of B2B marketers using text message marketing increased by 197%, while the number of B2C marketers grew by 92%.[1] This trend is unsurprising, as text message advertising is a lower-cost alternative to traditional marketing channels that boosts significantly higher open rates and conversion rates compared to email marketing.[2]

But before startups reach for their phones to capitalize on this new marketing channel, organizations should make sure their text message campaigns are in compliance with the federal Telephone Consumer Protection Act.

Background of the Telephone Consumer Protection Act

The Telephone Consumer Protection Act (TCPA) was passed in 1991 to help combat the great increase in telephone marketing calls received by residential consumers.[3] The TCPA applies to all marketing communications solicited over telephone, including via text message, along with fax.  Rules and restrictions on these types of marketing come from both the statutory language itself and rules the Federal Communications Commission (FCC) has passed to implement the law. The TCPA allows both the FCC AND private citizens to bring lawsuits against TCPA violators in both federal court and state court.

Non-compliance with the TCPA can result in significant costs to organizations. Companies can be penalized up to $500 for each individual text message that violates the law, and up to $1,500 per text message if a court finds that the violation was willful. TCPA violations are ripe for class action lawsuits, leading to large damage awards. These cases don’t settle for low amounts either – for example, a recent TCPA class action lawsuit against Rack Room settled for almost $26 million.[4]

How can startups comply with the TCPA?

Text message marketing is not going away anytime soon, so startups should ensure they are compliant with the TCPA. Here are six key considerations to take into account when evaluating whether your text message campaigns conform to federal law:

  1. Customers must consent to being texted

The TCPA does not permit organizations to text consumers unless those consumers have opted-in to receiving marketing messages. Companies must receive prior express consent from customers, usually written consent, before they can begin contacting customers. A customer simply providing their phone number is usually not sufficient to meet this standard – organizations must clearly disclose in a written agreement that the consumer permits a particular company to send them advertising text messages, and that the consumer is not required to consent to this activity in order to receive any goods or services.[5] This opt-in method could, for example, appear at the bottom of an order submission page as an unchecked box accompanied by the appropriate disclosure language.

  1. Make it easy for customers to opt-out

Even after customers have consented to receiving advertising text messages, they can revoke this consent, as long as they do it in a reasonable manner. Business are not permitted to limit the manner in which customers can revoke their consent and must add those individuals to an internal “Do Not Call” list (see next section) no later than 30 days after receiving the revocation.[6] Companies can, however, provide an interactive opt-out mechanism, such as allowing a consumer to remove themselves from future marketing by texting back the word “STOP”.

  1. Maintain an internal “Do Not Call” list

The FCC requires that organizations engaged in text message marketing to maintain internal “Do Not Call” lists and appropriate procedures for maintaining these lists.[7] This internal list should include both phone numbers on the National Do Not Call Registry, along with any individuals who have specifically requested not be contacted by the particular company. Companies should have a written policy for maintaining their internal “Do Not Call” list, and any “Do Not Call” requests received by the company must be honored for at least five years.

  1. You can’t text customers 24/7

Once a customer consents to receiving marketing texts, companies don’t have free reign over when these texts can be sent. The FCC has further stipulated that marketing messages cannot be sent before 8 a.m. or after 9 p.m. in the recipient’s time zone.[8] It may be best for companies to send text messages between 1 p.m. and 4 p.m., when it is unlikely that customers in any U.S. time zone (including Alaska and Hawaii) are outside of the impermissible range.

  1. If you say you’ll only send a certain number of texts, stick to it

Be cognizant of what you are promising to do when you tell consumers what they are opting into. Some organizations include in their opt-in language a range or maximum number of text messages a consumer should expect to receive within a certain time period. There’s nothing inherently wrong with doing this, but if you’re going to make such promises – stick to them. Even exceeding your promised limit of text messages by a single message can subject you to significant penalties. Just ask the Buffalo Bills, who in 2014 paid over $3 million in a class action lawsuit after they sent consumers six text messages in one week when they had promised to only send five.[9]

  1. If you use a third party to send text messages on your behalf, make sure they comply with the TCPA

Unfortunately, outsourcing your marketing efforts to a third-party company won’t protect your business from TCPA liability. Companies can still be vicariously liable if third-party marketers violate the TCPA, which means the company can be held responsible for the third-party marketer violating the law.[10] It’s important when selecting a third-party marketing company to ensure they are reputable and strictly comply with the TCPA.