How to Avoid SMS Campaign Compliance Violations

Papa Bear violated the Telephone Consumer Protection Act (TCPA) and is now embroiled in a class-action lawsuit. Build-A-Bear-Workshop, a chain retailer that enables buyers to adorn their stuffed animal with accessories of their choice, allegedly sent multiple text messages to consumers whose numbers are listed on the National Do-Not-Call Registry.

Bad bear.

Perhaps Papa Bear and his junior marketing bears were unaware of the string of compliance regulations and laws that help protect consumers from being bombarded with unwanted texts. Or maybe they didn’t comprehend the sting that can result from pushing one’s luck one too many times.

Either way, Build-A-Bear is now enmeshed in litigation after trying to market their Cy-bear Cyber Monday sales event.

But what marketer doesn’t want to use text messaging to drive more sales?

Text messaging campaigns are wildly successful. In a country where we look at our phones on average 200 times a day, you’re certain to catch a potential customer’s attention. The open rate of text messages is estimated to be over 90 percent, compared to marketing email open rates which sadly sit at only 20 percent.

But text messages are intrusive, and public outrage is mounting against text abuse. One robotext provider claims Americans got 18.6 billion spam texts in October 2022. That’s 66 spam calls for every U.S. citizen.

Build-A-Bear isn't alone in its legal entanglement over text messaging. Scores of other companies are also being sued for similar infringements. The Jiffy Lube franchise Heartland Automotive Service agreed to pay $47 million to settle a lawsuit for sending text messages that violated TCPA guidelines. The messages were sent to phone numbers that customers had entered on invoices they filled out for a previous sale but that was unrelated to the current campaign.

Life Time Fitness will also pay up to $15 million to settle a class-action lawsuit alleging the company violated TCPA rules. About 593,000 class members contended that the company "blasted unsuspecting individuals with text messages advertising deals on enrollment fees, personal training packages and other 'exclusive offers'."

The fast-food franchise Subway got lucky. It was called on the carpet with a class-action suit brought on by a consumer irate about an unwanted text message offering her a free bag of potato chips. Fortunately, Subway dodged the suit after a federal judge ruled that the consumer failed to allege the texts were sent using an automated dialing system.

Many highly regarded, legitimate businesses often falter when it comes to matters of compliance in marketing. Even the most brilliant marketer may not be the legal eagle needed to navigate the regulatory maze of how to execute a text message campaign that doesn’t violate people’s rights.

Build-A-Bear, Jiffy Lube, Life Time, and Subway are just some of the popular U.S. brands to get a slap on the wrist or a major financial penalty from compliance blunders. Dell, Simon & Schuster, Burger King, and Timberland are also members of this ignominious club, kept quiet as most companies would prefer to keep their legal missteps under wraps.

Word to the wise: Any marketer considering a text messaging campaign must take precautions. Violations can result in monetary fines of $500 to $1,500 per unsolicited text message. It adds up quickly: if you send 1,000 texts that are deemed intentional spam, you could be on the hook for $1.5 million.

At the most basic level, marketers must follow the rules. Use written consent guidelines to ensure that your first message to a new subscriber includes all of the necessary information: business name, reason for messaging, message frequency, rates disclaimer, privacy policy and terms, and opt-out instructions.

In short, compliance doesn’t come easy. And the risks are huge if you go the “do-it-yourself” route. There's just too much danger to small and medium-sized businesses trying to navigate a safe path through the mess of regulations and laws.

Companies may be reluctant to pay professional service fees that don’t add to their bottom line, but the havoc a TCPA violation can bring to an organization could be catastrophic.

Our best advice is to protect your business by working with professionals who know the compliance landscape inside and out. You may be surprised at how easy and effective it is to work with an advisor who knows the text messaging ropes.

Noah Rafalko is the founder and CEO of TSG Global, Inc., which provides voice, messaging, and identity management services for SaaS companies and large enterprises.