Text Message Laws Businesses Should Know
SMS marketing, also known as SMS marketing, is becoming a popular marketing channel. This rapid growth has led many companies to scramble to integrate SMS marketing in their marketing strategies. Before you begin, however, it is essential to understand the laws surrounding this method of marketing. Even if you might not have the intention of breaking the law, there are aspects of compliance that can be easy to ignore, and even a small oversight could cost your business millions of dollars and undermine trust. consumers in your business.
What are the laws on SMS marketing?
Several governing bodies have created regulations regarding telemarketing communications. These laws are constantly updated to reflect technological advancements and changing business practices. Here are some of the laws you should know:
Consumer Protection Act by Telephone
The Consumer Protection Act by Telephone (TCPA) is the primary telemarketing law in the United States. Adopted by Congress in 1991 and governed by the Federal Communications Commission (FCC), the TCPA has been modified several times to target Unsolicited SMS and phone calls. It emphasizes the right to privacy through the following measures:
- Automatic dialing restrictions. The TCPA imposes restrictions on automated calls, in which an Automatic Telephone Numbering System (ATDS) calls or sends messages to consumers without human intervention by selecting phone numbers from a list stored digitally.
- Identification. Business entities must identify themselves and clearly indicate the reason for their contact.
- Business hours. Communication must take place between 8 a.m. and 9 p.m.
- Unsubscribe functions. Consumers can request that their telephone number be placed on a do not contact list at any time. All text communications must allow consumers to opt out of the company’s subscriber list by responding directly to the text.
- Prior express written consent. Companies cannot contact customers with sales or marketing offers without obtaining prior express written consent. No previous contact, verbal confirmation or purchase history can substitute for this express consent.
The Federal Trade Commission (FTC) issued on Unsolicited Pornography and Marketing Assault Control Act (CAN-SPAM law) to fight against unsolicited email messages containing explicit or offensive content. It complements the TCPA by extending the laws governing automatic dialers to all business entities. Informational messages that do not promote new business, such as those regarding the status of a purchase already made, are an allowed exception; they can be sent to customers without express written permission.
The CAN-SPAM law was created in 2003, before the widespread adoption of text messaging, so it does not fully regulate communication by SMS. The FTC is authorized to draft new SMS marketing regulations within these guidelines, but the FCC remains the primary arbiter of SMS communication laws, through the TCPA.
Cellular Telecommunications Industry Association Guidelines
The Cellular Telecommunications Industry Association (CTIA) is a national trade group representing the wireless communications industry. The CTIA is not a governing body, but it can interrupt and block the SMS services of companies that refuse to comply with its guidelines.
CTIA offers a Messaging Principles and Best Practices Document to define and develop many provisions set out in the TCPA and CAN-SPAM law. The document describes exactly what a business must do to obtain a legally binding offer of express written consent from consumers.
Express written consent
Express written consent, as required by the TCPA and defined by the CTIA, validates the contract between a business and its customers to communicate by text messaging. The customer’s offer of consent to telemarketing must meet, in a unique written form, these five criteria:
- Disclose to each client the nature of the reasons why the company asks for their contact details
- Describe a reasonable forecast of how often customers will receive messages and explain the content that these messages will contain
- Provide access to all of the terms and conditions of their consent, generally via a hypertext link or a direct response option
- Enable customers to immediately terminate the contract at any time and for any reason through a direct response
- Let them know that standard messaging and data rates will apply
Brian Wilson, Chief Revenue Officer of SlickText, stated that it is essential to obtain express and complete written consent.
“The most common mistake we see is not receiving prior consent,” Wilson told business.com. “If there is one central rule about complying with federal regulations, it is to receive consent from the people you are going to send by message.”
International consumer privacy laws govern all communications within their jurisdiction, regardless of the company’s headquarters. The strictest of these laws is that of the European Union General Data Protection Regulation (GDPR).
In addition to requiring express consent, the GDPR obliges any company wishing to store data from European customers to comply with six additional data privacy requirements. Compliance with these extensive regulations requires significant financial and legal investments.
Canada has its own set of laws – Canada’s anti-spam legislation (CASL) – but the differences between CASL and TCPA mainly relate to email. If your SMS campaigns meet the criteria for express written consent set out by the TCPA and CTIA, they will likely be authorized under CASL guidelines. If you are unsure whether your campaigns meet US or international criteria, consult a legal advisor.
What are the penalties and fines for non-compliance with the laws?
Even fair a mistake with text messaging compliance can result in hefty fines, and a full understanding of prior express written consent does not protect businesses from all errors. Garrett Olexa, practicing lawyer at Jennings, Strouss & Salmon PLC, warns of several other mistakes businesses often make.
A common misstep, he said, is “to mistakenly assume that just hiring a third party to send the texts shields their business from liability.”
Even using a separate SMS service, companies remain responsible for the content of their messages. Each violation results in a fine of $ 500 per event. In other words, this is the penalty for each individual message in violation of TCPA compliance, not the fine for the entire campaign.
Therefore, an SMS campaign that illegally sends messages to 1,000 contacts would result in penalties of at least $ 500,000. The fines for any violation found to be intentional are then tripled to $ 1,500 each. In that same 1,000-contact campaign, the total penalty, if considered premeditated, would be $ 1.5 million – and that assumes that only one message was sent to each contact.
These damages are not capped and companies are held liable for any breach. As subscriber lists grow, so does the potential damage, often exceeding insurance coverage.
Olexa warned companies against “assuming their corporate liability insurance coverage will apply to any violation of the law, which is often not the case. “
How to Avoid Breaking SMS Marketing Laws
The potential for fines and regulations could discourage some businesses from using SMS marketing, but Bulk SMS is too effective to ignore. Here are several ways to meet TCPA requirements while successfully marketing your business:
Include all information necessary for express written consent.
Use the express written consent guidelines above to make sure that your first message to a new subscriber includes all of the necessary information. It must contain the following information:
- Company Name
- Reason for messaging
- Message frequency
- Unsubscribe instructions
It sounds more intrusive than it is. Here’s a simple template to get you started:
“Hi [Name], thank you for subscribing to [Company] Summer sale! We will send you personalized offers every week. Up to 4 messages / month. Messaging and data charges may apply. Answer HELP to review conditions, STOP to cancel. “
Use keyword short codes.
A keyword short code is a word or phrase that customers can text to a specified number to subscribe to your text messages. Companies can provide this keyword to the customer in a CTIA compliant disclaimer that includes all the elements of an express written consent. When a customer replies with the keyword, they have given their consent.
These messages can be displayed through onsite signs or by email and text. A physical panel can list the URLs that customers can use to access the terms and conditions.
Consider a double opt-in.
A double membership is the most secure way for a business to ensure the legality of its text messages. Once a subscriber provides their phone number, send a message asking them to confirm their subscription by responding “Yes” or “No”. The double opt-in removes any doubt that a key message or email subscription has not obtained the express written consent of the consumer.
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Keep your promises.
SMS campaigns offer the highest open rates from all marketing channels. This can cause a business to flood subscribers with SMS notifications, but contacting customers too frequently can expose you to breaches and damage your brand image.
SMS laws ensure that a business is committed to meeting the promised SMS schedule. By obeying these laws, your text messaging will remain an infrequent surprise and customers will be less likely to get angry and perceive these messages as spam.
Offer an incentive to register.
Offer value to customers who subscribe to your text messages. For example, subscribers may receive discounts, limited-time offers, or additional features to your core services, such as delivery tracking or real-time alerts. Think about how your favorite brands might convince you to provide your phone number, then see how your business might use a similar approach.