FTC Brings First Action Against Text Message SPAM6 Jun, 2011 By: Linda A. Goldstein
As direct response marketers begin to experiment with mobile marketing, they should be mindful of the federal laws that regulate this rapidly expanding platform.
Under the Telephone Consumer Protection Act and Can-SPAM, it is absolutely prohibited to send unsolicited text messages to a wireless device. In addition, several recent cases have firmly established that a text message is considered a “call” under the Telephone Consumer Protection Act.
This past month, the Federal Trade Commission (FTC) brought its first suit against an alleged Short Message Service (“SMS”) spammer. The FTC claims this company sent more than 5.5 million unsolicited messages to consumers’ mobile phones. The agency is seeking to freeze the assets of the defendant, Philip Flora, and to shut down his entire business operation.
According to the FTC complaint, Flora sent text messages at a rate of 85 per minute 24 hours per day. The messages instructed recipients to visit a specific website or respond to the messages via text. Flora then allegedly sold the names and information of those who responded to other marketers, including the names of consumers who had contacted Flora to request that he stop sending them texts.
The FTC also charged Flora with violating the Can-SPAM Act by allegedly sending unsolicited E-mails advertising his services and failing to include a physical address or an opt-out as required by Can-SPAM.
The case is particularly interesting for a number of reasons. First, this is the first time the FTC has brought a case against text message spam. What is perhaps most noteworthy, however is that because Can-SPAM does not specifically cover “text messaging,” the FTC relied on its broad authority under Section 5 of the Federal Trade Commission Act and alleged that it was an unfair and deceptive practice to send the unsolicited text messages because consumers would be charged for those messages. Marketers should also be aware that while this is the FTC’s first foray into unsolicited text messages, consumers have brought private actions against text spammers under the federal laws noted above.
Yes, mobile marketing opens new marketing opportunities and platforms for direct response. However, the laws surrounding this technology are complex and varied, and marketers should be particularly diligent in ensuring that they have proper consent from consumers to whom any text messages will be sent. Failure to properly obtain consent can lead to regulatory enforcement and class action challenges.