SMS marketing, or text message marketing, is gaining popularity as a marketing avenue. Many businesses are rushing to include text message marketing in their marketing strategies due to its rapid rise. But before you begin, you must be aware of the legal restrictions on this kind of advertising. Even though you might not intend to break the law, it can be simple to overlook some compliance-related issues. A small mistake could end up costing your company millions of dollars and eroding customer confidence in your brand.
Which laws apply to text message marketing?
Regulations concerning telemarketing communications have been established by several regulatory agencies. These laws are always being updated to take into account new developments in technology and changing business practices. The following are some laws that you need to be aware of:
The Telephone Consumer Protection Act
The main telemarketing law in the US is the Telephone Consumer Protection Act (TCPA). The TCPA, which was passed by Congress in 1991 and is overseen by the Federal Communications Commission (FCC), has undergone multiple amendments to specifically target unsolicited phone calls and texts. It highlights private rights by implementing the following strategies:
- The Telecomplaint Counsel Association (TCPA) prohibits robocalls, which are automated phone systems (ATDS) that choose phone numbers from a list that is digitally stored and call or message customers without human intervention.
- Business entities are required to provide their full name and the purpose of their contact.
- Contact is required between the hours of 8 a.m. and 9 p.m.
- Customers may, at any moment, ask to have their phone number added to a list of people they should not be contacted. Customers must be able to directly reply to any text message to opt out of the company’s subscriber list.
- Businesses are not allowed to contact clients with marketing or commercial offers without first getting their express written consent. Nothing from prior correspondence, verbal affirmations, or past purchases can take the place of that express consent.
The CAN-SPAM Act
To combat unsolicited email messages containing explicit or offensive content, the Federal Trade Commission (FTC) published the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act). Extending the laws governing autodialers to all commercial entities enhances the TCPA. Customers may receive informational communications without their express written consent as long as they don’t solicit new business, such as those informing them of the status of a transaction that has already been completed.
The CAN-SPAM Act does not entirely regulate SMS communication because it was drafted in 2003 before text messaging became widely used. Within these parameters, the FTC is allowed to draft new text message marketing regulations; however, the FCC continues to be the primary arbiter of SMS communication laws.
Guidelines from the Cellular Telecommunications Industry Association
The wireless communications industry is represented by a national trade association called the Cellular Telecommunications Industry Association (CTIA). Though it is not a regulatory body, the CTIA has the authority to stop and prohibit companies that violate its policies from using its texting services.
Many of the provisions outlined in the TCPA and CAN-SPAM Act are defined and elaborated upon in the Messaging Principles and Best Practices document, which is made available by the CTIA. The document provides detailed instructions on what a company needs to do to obtain a legally binding offer of express written consent from customers.
Give written consent in advance
The CTIA’s definition of express written consent and the TCPA’s requirement for it validates the agreement between a business and its clients to communicate via text messaging. In one written document, the request for customer consent to telemarketing must satisfy the following five requirements:
- Tell every client why the company is requesting their contact information.
- Provide a realistic estimate of the frequency of messages that customers should expect, along with an explanation of the contents of those messages.
- Give them access to the complete consent terms and conditions, usually via a direct reply link or hyperlink.
- Permit clients to quickly end the contract by sending a direct reply at any moment for any reason.
- Tell them that standard data and messaging rates will apply
International legislation
International consumer privacy laws apply to all communications made within their borders, regardless of where a company has its main headquarters. The General Data Protection Regulation (GDPR) of the European Union is the most stringent of these laws.
The GDPR requires six additional data privacy requirements to be met by any business that wants to store customer data from European Union citizens in addition to the requirement for express consent. Adhering to these complex regulations necessitates substantial financial and legal outlays.
The Canadian Anti-Spam Legislation (CASL) is a separate body of legislation, but it primarily relates to email in contrast to the TCPA. Your SMS campaigns should be allowed under CASL guidelines if they satisfy the express written consent requirements outlined by the TCPA and the CTIA.
What are the fines and penalties for breaking the law?
A complete grasp of prior express written consent does not protect businesses from all errors, and even one text messaging compliance error can result in significant fines. Vice President of legal affairs at Sun Health Garrett Olexa alerts us to a few more common errors that companies make.
Businesses still have to be accountable for the messages they send, even if they use a different texting service. Every infraction results in a $500 fine for each instance. Put differently, this represents the fine for every single message that violates TCPA compliance.
Therefore, there would be fines of at least $500,000 for an SMS campaign that unlawfully messaged 1,000 contacts. If a violation is found to be intentional, the fines are tripled to $1,500 per infraction. If the campaign with 1,000 contacts was found to be premeditated, the entire fine would be $1.5 million, assuming that each contact received a single message.
How do companies avoid breaking the law regarding text message marketing?
While some businesses may be deterred from utilizing SMS marketing due to the possibility of fines and regulations, mass texting is simply too successful to overlook. Here are a few strategies to effectively market your company and meet TCPA requirements:
Provide all the details required for explicit written consent. Make sure you include all the information required in your first message to a new subscriber by following the guidelines for express written consent mentioned above. It ought to include the following details:
- Company name
- Motive behind the message
- Message frequency
- Disclaimer about rates
- Terms and privacy policy
- instructions for opting out
It doesn’t sound as intrusive as it does. This is a basic template to get you going:
“Hello [Name], I appreciate you registering for the [Company] Summer Sale! Weekly customized deals will be sent to you. four messages per month, maximum. Data and message rates might apply. To review terms, reply HELP; to cancel, reply STOP.
Make use of shortcodes for keywords
Customers can use a keyword short code, which is a word or phrase, to text a specific number to subscribe to your text messages. Companies may include that keyword in a disclaimer that complies with CTIA regulations and contains all necessary elements for express written consent. Customers have given their consent when they reply with the keyword.
Think about using two opt-ins
The most secure method for a company to guarantee the legitimacy of its text messages is to use a double opt-in. Send a message to a subscriber asking them to confirm their subscription by responding “yes” or “no” after they have provided their phone number. Any doubt that a keyword message or email subscription did not obtain the customer’s express written consent is eliminated by the double opt-in.
Keep your end of the bargain
Out of all marketing channels, text message campaigns have the highest open rates. This may entice a company to bombard its subscribers with SMS notifications, but reaching out to clients too frequently could put you in violation of the law and harm your reputation.
SMS laws guarantee that a company will adhere to its stated texting schedule. Following these legal guidelines will ensure that your text messaging stays a pleasant surprise for your customers, preventing annoyance and misinterpretation of your messages as spam.
Provide them with a reason to register.
Provide value to consumers who subscribe to your text messaging service. For instance, subscribers might be eligible for special offers, discounts, or extra features like real-time alerts or delivery tracking for your main services. Think about the strategies your favorite companies use to get you to give them your phone number, and then explore how your company could apply a similar strategy.