Mobile Marketers Win Important FCC Text Message Ruling

Decision gives marketers legal basis for sending text message receipts

Companies can safely get back into text messaging marketing programs, now that the Federal Communications Commission has clarified a '90s-era communications law.

The FCC's declaratory ruling released Thursday confirmed that companies and organizations may legally follow industry best practices and send a final, onetime text to confirm receipt of a consumer's opt-out request of a text messaging program.

SoundBite Communications, a company that manages text message programs for more than 450 companies, filed the petition last March in response to a growing number of class action lawsuits that alleged receipt text messages were in violation of the Telephone Consumer Protection Act. Passed in 1991 before text messaging grew into a robust marketing strategy, the law restricts the use of autodialers to make non-emergency calls without prior express consent to any telephone number assigned to mobile phone services.

Last year, Barclays paid more than $8 million to settle a class action suit filed in California that it violated the TCPA because it sent a confirmatory text message. Other companies that have been threatened with lawsuits include American Express, Twitter and Facebook, and SoundBite clients Gamestop and Bank of America.

"When Barclays settled, that created a cottage industry [of lawsuits] overnight," said Jim Milton, SoundBite's president and CEO. "When we filed the petition, we said enough is enough."

Left unabated, the lawsuits could have cost the mobile marketing industry billions of dollars, said Michael Becker, North American managing director for the Mobile Marketing Association, which supported SoundBite's petition, along with 11 companies, including AT&T Mobility, 4Info and Mogreet.

"Some companies just stopped using text messaging because it put them at legal risk. It was easier to stop than fight," Becker said.

The decision was an easy one for the FCC, which hadn't received a single complaint about the practice. It actually got complaints from consumers who did not receive a confirmation text.

"Today's common-sense order ends the legal lacuna and the courtroom arbitrage it has inspired," commissioner Ajit Pai said in a statement. "Hopefully, by making clear that the act does not prohibit confirmation texts, we will end the litigation that has punished some companies for doing the right thing."

"This isn't spam, it isn't robo dialing. It's a permission-based marketing model. The FCC's ruling recognized that," said Becker. 

Now that the legal impediment is out of the way, the mobile marketing business should get a boost. "I don't know that it will be an immediate snap back, but it will certainly help," Milton said. "There's no question this had an impact on the industry and it shouldn't have."

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