4 Ways to Use Text Messaging Without Risking Class Action Nightmares
Protect your dealership by getting the correct consent from customers
At a recent industry event, several speakers discussed the need for dealerships to get on board with using text messaging to communicate with customers. Studies show the majority of customers prefer to receive text messages regarding the status of their purchase or repair. Done correctly, texting keeps the customer informed, provides a record of the transaction, and leads to fewer disputes over what was authorized.
Texting a consumer incorrectly, however, can land you in a class action nightmare.
The Telephone Consumer Protection Act (TCPA) requires “express consent” for nonsales calls or texts to a cell phone, and “prior express written consent” for any message that includes or introduces an advertisement.
Under the TCPA, individuals who receive unsolicited cell phone calls or text messages can recover a minimum of $500 per unintentional violation and $1,500 per willful violation. These statutory penalties have resulted in astronomical class action settlements, with new actions being filed almost daily.
Whether the phone system and equipment you are operating constitute an autodialer is a discussion for a different day. Arguments over a system’s capacity are plentiful, and are given vague guidance by the Federal Communications Commission.
Regardless of the equipment used, you can protect your dealership by understanding the consent required for transaction and marketing texts, obtaining the necessary consent from customers for each, and maintaining a procedure to avoid costly pitfalls.
Prior express consent is required for nonsales text messages. These messages are deemed transactional and relate directly to a vehicle purchase or service. Express consent need not be written, and is deemed to have been given by consumers when they provide their cellular number as the one to contact.
Prior express written consent requires a written agreement signed by the customer clearly authorizing advertisements or telemarketing messages. The written agreement must include a clear and conspicuous disclosure advising consumers that by signing they are:
- Agreeing to receive advertising and telemarketing messages; and
- Not required to sign the agreement directly, or as a condition of a purchase.
The slippery slope occurs when a service-related text requiring only express consent introduces an advertisement or promotion that requires prior express written consent. This happens when a text concerning the service a customer had on a vehicle goes on to let him or her know about, for example, an upcoming tire sale, changing the message from transactional to marketing/advertising.
Avoiding messaging missteps and protecting your dealership may be done by:
- Obtaining the customer’s preferred method of contact on a written form.
- Using dealership forms, e.g., repair orders and sale documents, that include language consenting to phone and text messaging.
- Creating a written consent form for customers to sign authorizing you to contact them via text, etc., for promotion and marketing purposes, with the required disclosures.
- Ensuring all text messaging goes through the dealership, and not being allowed from personal cell phones.
When texting, erring on the side of caution is a sound business policy. TCPA violations are costly, and defending a class action suit is not cheap, even if it never goes to trial.
David R. Missimer, email@example.com, is general counsel for Automotive Compliance Consultants Inc. (www.compliantnow.com). He spent 28 years in private practice as a seasoned litigator and trial lawyer representing lenders, auto dealers, and numerous other entities and individuals.