On-Demand TCPA Plaintiffs? There’s An App For That
The Telephone Consumer Protection Act (TCPA) was enacted to protect consumers from abusive telemarketing practices by making it unlawful to initiate unsolicited telemarketing messages. Recently, however, there has been a significant increase in TCPA litigation involving on-demand solicited text messages that consumers affirmatively request to receive in response to a call-to-action display. TCPA plaintiffs’ attorneys are even going so far as to offer apps that automatically report these text messages their clients request.
A recent class action filed against Tommy Hilfiger is representative of this trend. In this case, the plaintiff had to text “TOMMY” to Tommy Hilfiger’s short code (289784) to enroll in the brand’s mobile alert program. The first reply text received by the plaintiff after he requested to be enrolled in the program informed him exactly how to opt out by replying “TOMMY STOP.” This text also included a link to the program’s terms and conditions. Based on the plaintiff’s own acts and his refusal to opt out of the program he joined, he is now seeking to certify a nationwide class action comprised of all individuals who received a text message from Tommy Hilfiger, with damages of at least $500 per text message.
How is providing a consumer exactly what he asked for a potential violation of the law, entitling the consumer to $500 per message? Plaintiffs’ attorneys are attempting to exploit a perceived gap in changes to the Federal Communications Commission’s (FCC) regulations implementing the TCPA. Through its rule changes, the FCC was attempting to address “continued consumer frustration with unwanted telemarketing robocalls,” which historically have been prerecorded “cold calls” the consumer wasn’t expecting and didn’t ask for. Thus, effective October 16, 2013, the FCC’s rules prohibit initiating any autodialed and/or prerecorded telemarketing message unless the consumer provided his or her “prior express written consent.”
Mobile text alerts requested by the consumer, however, were not even on the FCC’s radar in 2010 when it requested comments about this heightened consent requirement for autodialed and/or prerecorded telemarketing messages. But since then, consumer engagement through mobile programs has grown exponentially. Indeed, the immediacy of text alerts is currently unparalleled by any other channel. According to studies, about 90 percent of all text messages are read within three minutes of their delivery, and over 99% of all text messages are read by the recipient. TCPA plaintiffs’ attorneys, however, are now taking the position that it’s largely impossible to obtain a consumer’s prior express written consent before responding to their affirmative request to opt into a brand’s mobile program. And despite requests by industry members to put a stop to frivolous lawsuits based on consumers soliciting the very text messages they are filing lawsuits about, the FCC has so far refused to clarify that the TCPA was not enacted as a substitute for winning the Powerball.
So how can brands engage consumers who want to join the brand’s mobile alert program while minimizing the chances of getting a demand letter from the Saul Goodmans of the world? The best line of defense is to include specific and conspicuous disclosures on any call-to-action display that prompts a consumer to join a brand’s mobile alert program and which otherwise complies with the FCC’s prior express written consent requirements. The FCC expressly permits companies to obtain consumers’ signatures through electronic means, such as by text message or telephone keypress. And it is quite common that a contractual agreement can be memorialized in multiple writings. In this case, call-to-action display + text message signature = prior express written consent.
Thus, as long as the disclosure on the call-to-action display complies with the FCC’s consent requirements for telemarketing messages, no consumer should be able to complain that he didn’t know what he was signing up for. One note of caution here: proving that a brand has the requisite consent to send text messages is typically an affirmative defense that the brand has the burden of establishing. So make it easier on yourself and keep the disclosure language consistent across call-to-action displays, because it might be impossible to determine whether John Doe was prompted to enroll by a sign hanging in the mall or by a post on your Facebook page.
Another risk mitigation strategy is to develop a double opt-in enrollment process whereby the brand not only obtains a consumer’s prior express written consent as described above, but also gets the consumer to affirmatively agree to the brand’s terms of service designed for the mobile alert program. In the terms, brands can flesh out exactly how the mobile alert program will operate, but also include class action waiver and arbitration provisions that should dissuade TCPA plaintiffs’ attorneys from wanting to litigate.
Given the TCPA’s (excessive) statutory damages, the relative lack of clarity from the FCC and courts to date, and the potential exposure from large-scale mobile-marketing campaigns, the plaintiffs’ bar is extremely active in pursuing these cases. But incorporating these recommendations into how your brand acquires consumers’ phone numbers, what you tell them when you collect it, and how you use that information can go a long way to ensuring that your brand complies with the TCPA.
Arent Fox advises many brands on their mobile engagement programs and monitors cases like Tommy Hilfiger’s as part of its deep experience in both the fashion and mobile industries and in connection with the various TCPA class actions it is currently defending. Please contact Anthony Lupo, Sarah Bruno Mike Hazzard or Adam Bowser with any questions.