Artisan Spirit: Fall 2023

Page 27


TEXTING YOUR CUSTOMERS? Dot Your “I’s” and Cross Your TCPAs


he TCPA — an innocuous four-letter acronym — stands for the Telephone Consumer Protection Act of 1991,1 and though it was passed when cordless landlines were a sign of luxury, it covers not only telephone calls but texts as well.2 The TCPA, itself and through regulations passed by the Federal Communications Commission, sets express regulations on when, and how, you can call or text solicitations to your customers. While full of rules and exceptions, it boils down to a simple maxim: Don’t call or text customers or potential customers without getting their written permission first, and stop calling or texting them when that permission is revoked. Importantly, the TCPA also sets draconian penalties for violators. A negligent (read: unintentional) violation carries a per instance penalty of $500. An intentional violation is triple that, for each violation. In other words, if you text 10 customers without permission, the penalty is 10 times. Given the current state of texting technology, businesses can send text message ad campaigns to thousands of customers, those penalties can add up quickly. One court awarded a judgment of nearly a billion dollars against a single company.3 While that amount is an extreme example, even six-figure liability exposure can be enough to tank a business. Accordingly, it’s wise to know the basics of the TCPA so your business doesn’t inadvertently run afoul of its strictures. 1


And for the three of you receiving this via fax machines … those too.

3 For the legal nerds out there, the defendant in that case appealed on the grounds that the award was unconstitutionally high. In a glimmer of hope the Ninth Circuit Court of Appeals in Wakefield v. Visalus, Inc. recently reversed the decision. The Court determined that even if the individual penalties ($500 or $1,500) are appropriate, when aggregated across thousands (or millions) of consumers the amount may become impermissibly high. Unfortunately the Court didn’t expressly find the $925 million judgment to be excessive on its face. Instead, it ordered the trial court to assess the award under specific criteria and decide if the amount was appropriate. W W W . ARTISANSPIRITMAG . C O M

“But what about all of the spam calls and texts I’m getting every day? How are those people staying in business?” you mutter. Point well taken. Some of the companies are run offshore and would be difficult to find and sue. Others are judgment proof and don’t care. Still others hope that with so many violators out there, they can get lost in the noise. But those aren’t the people reading this article. Regardless, there is a healthy contingent of plaintiffs attorneys out there that do nothing but find angry customers that are willing to sue for the promise of some easy money. Alright so now you’re thinking, “but I don’t text or call my customers with solicitations.” Yes, that’s a great way to avoid TCPA violations. However, there are some insidious business cases to watch out for to make sure you don’t slip into the danger zone. For example, will someone deem your message a “hybrid” one to which these requirements apply? First, if your business takes reservations, odds are good you have a system in place to text customers when their table/tour/ etc. is ready. They would have given you their number for that purpose and there is likely no issue texting them for that purpose. Where you can run into trouble is if you then send them a text with a coupon or something unrelated to their reservation. That can’t be done unless you’ve received express written consent beforehand. Second, your business’s point-of-sale system may have a customer relationship management system built in. Those systems can collect phone numbers and other customer contact information. Then when you bring in your new marketing director, they see a gold mine of contact information. However, if those customers didn’t consent to solicitations, it’s actually a landmine. And third, you may be using a vendor to run ad campaigns for you. The law is developing on this issue, and whether you can 27

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