Hefty fines for companies not following opt in SMS messaging policies
Last week, in my Can you send anyone a text message? post I talked about the best practices of getting a documented opt in before sending a SMS marketing message. After that post went live, there was an announcement in the US that the large telecommunications company Sprint was fined for violating the US regulations against spam texting. Not being able to resist such a great example of what not to do, I decided to share some of the details of the Sprint case as well as a UK example to prove the point.
The US Federal Communications Commission fined Sprint $7.5 million (£4.4 million) for sending text messages to those who had requested not to receive them. The people Sprint contacted had specifically opted out of receiving messages. The fine is so large because this isn’t Sprint’s first offence. Back in 2011 the company paid $400,000 ( £237k) in a settlement over similar complaints.
After this latest incident, Sprint is also required to create a compliance program and report regularly to the FCC to ensure there are no more violations for a period of two years.
It’s pretty clear the company wasn’t trying to violate anyone’s privacy or right to refuse communications. They certainly were at fault, but the error was in their processes and software used for compliance. The new compliance program they are creating should solve their problems (or they’ll be in bigger trouble next time).
That isn’t always the case though. Sometimes companies are operating with dubious intentions. That is, they knowingly spam people with text messages. At least it appears that way.
Last December First Financial (UK) Limited was issued a monetary penalty by the Information Commissioner of the Privacy and Electronic Communications. First Financial hadn’t been registered very long, didn’t completely fill out their company records, and sent text messages to over 4000 people that never requested them. In fact, the full Monetary Penalty Notice asserts that the company operated using unregistered SIM cards in an attempt to circumvent spam filters (a well known practice to those who attempt to avoid regulations). The text messages were designed to appear as if they were from friends, or people they knew, with links encouraging the receiver to apply for loans. In addition to being deceptive in nature, the messages were sent at odd hours of the day disrupting the recipients and causing distress for many.
Given the nature of the business , the number of complaints received, along with a list of other criteria, the Information Commissioner imposed a fine of £175k. It seems clear their intent was to violate the law until they were caught. The First Financial websites referred to in the complaint are no longer active.
As these two examples show, violations of the opt in requirement can be inadvertent or deliberate. Inadvertent violations can stem from being unaware of the regulations, or errors in process such as with Sprint. To avoid this type of problem you need to ensure a clear, documented opt in process for your company. And also be sure to honour those who opt out according to the process you put in place.
While the fines are expensive, the customer relations issue resulting from texting those who don’t opt in could be even more costly. At least if you’re a reputable company working hard for your customers business.
Sprint is a large company and probably won’t see any impact at all from the most recent fine (other than the improvement in their internal processes). In the States it wasn’t big news, just another headline among many.
But for smaller businesses the loss could be much greater, and perhaps financially crippling. So just remember the answer to the question, “Can I text anyone marketing messages?” is a resounding no if you don’t have their express permission.
All businesses are subject to the law when it comes to advertising and marketing. Companies cannot make false claims or mislead consumers via advertising materials, for example. Designed to protect consumers and commercial clients, the law regulates most forms of marketing in some way. With companies carrying out various forms of marketing activity, it can be difficult to keep on top of the relevant laws and guidelines. By working with SMS marketing experts, however, you can ensure that your marketing campaigns are fully compliant with the necessary laws and that you’re able to connect with your target audience lawfully and effectively.
The regulations about SMS marketing are quite clear. But sometimes people, and companies, can make mistakes. Find out what happened to a company that reacted poorly to the ICO’s request for information, and how it made their situation so much worse.
SMS spam is a problem worldwide. But in the UK, we’re less likely to get it than many other countries. Find out why that is, see some examples, and how you can do your part to keep your SMS messages free of spam.
Executed properly, SMS direct marketing is a hugely effective and successful means of building customer loyalty and improving sales. But even genuine and honest marketing companies can suffer huge damage to reputation or even break the law through simply lacking knowledge or not double-checking before releasing campaigns. Read this article to learn more about the definitions of spamming and harassment, current UK law and how to avoid simple but costly mistakes.