Mobile Marketing CAN-SPAM Confusion, Beware the TCPA Bite

It is startling the number of marketers managing a mobile campaign who ask advice on whether they are in compliance with the CAN-SPAM Act. The assumption that mobile marketing and consumer opt-ins are regulated by the CAN-SPAM Act is largely a result of the high profile it enjoys and the overlap with email to text messaging services offered by wireless carriers. However, it’s the unexpected Telephone Consumer Protection Act (TCPA) of 1991 whose bite has turned out to be worse than its bark.

Given that text messaging, the main marketing contact channel for mobile phones, was yet to come into existence when the TCPA was enacted in 1991, it’s not surprising that many marketers believe it is limited to governing telemarketing voice calls. Whilst it’s true that legislators at the time could not have been aware of SMS, the FCC and several court judgments have taken the view that a “call” can indeed include a text message, not just voice. There is no doubt we will see future legal challenges, but for now, it appears the case law is becoming increasingly settled and has important ramifications for mobile marketers.

The judgments extend back to 2005, however just last month, the District Court of Northern Illinois in Abbas v Selling Source again upheld the TCPA’s application to text messages. It relied in part on what will be seen as an increasingly important judgment, the Federal Court of Appeals decision last year reinstating a $90m lawsuit in Satterfield v Simon & Schuster. In this case, Ms Satterfield signed up to receive a free ringtone and ticked a checkbox opting in to affiliate marketing. Sometime later, Ms. Satterfield’s young son received a text message in the middle of the night from Simon & Schuster, advertising a novel by Stephen King warning him that the “next call you take may be your last”. The Satterfield case is also interesting for its debate on what constitutes mobile opt-in consent, demonstrating that courts will not be so friendly to marketers who are not clear with their intent.

For now, the courts seem content to dole out severe financial penalties to companies that ignore violations of the TCPA. In one of the largest payouts so far, US boots and clothing company Timberland and it’s ecommerce partners were forced to pay more than $7 million to settle a class action lawsuit brought against them for allegedly sending thousands of unsolicited SMS text messages to potential customers’ cell phones. Timberland denied any wrongful conduct and blamed responsibility for securing opt-in consents on its mobile marketing company. What is clear is that at up to $1500 per violation (ie; per text message) it may be an expensive exercise if you or a third party provider get it wrong.

Not all of the TCPA rules necessarily apply to text messaging, but with the courts willing to apply broad interpretations, it may not be worth the risk by ignoring them.

There is a longer length version of this article on our mobile marketing blog where we welcome your comments and debate.