2012
Email and Text Message
Campaigns
Justine Young Gottshall
Partner, InfoLawGroup
What’s the Risk?
Effective and active marketing area
This makes it a target for litigation and enforcement action
– Consumer class actions
– FTC and State Attorney General enforcement
– Congressional hearings and inquiries
– PR/“Wall Street Journal” issue
May be unclear how certain rules and regulations will be enforced with
regard to new types of campaigns and use of new technologies and third
party platforms
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E-mail Campaigns – Overview
“Spam” isn’t only bulk or junk mail!
All “commercial emails” must comply with CAN-SPAM Act of
2003
– Federal Trade Commission (FTC) Rules
– Federal Communications Commission (FCC) Rules
What’s the PENALTY?
– $16,000 per violation (i.e. per email)
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E-mail Campaigns – Overview
Enforced by the FTC and State AGS
– Private right of action for ISPs
– No private right of action for consumers
Generally preempts state laws – except for those dealing with
falsity/deception/fraud
Watch out for class action lawsuits under state laws alleging fraud
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Real World Examples
Adscend
Media
Settles
With
Washington A.G. for $100,000. Case
originally brought jointly with Facebook
and included the owners of the
company.
Note:
Adscend
held
responsible for actions of affiliates.
Allegations were fraudulent messages
sent through Facebook that appeared to
come from a user’s friends. For now,
Adscend agrees Facebook messages
are covered by CAN-SPAM (May 2012).
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Real World Examples, Cont.
$2.9 million FTC settlement with
ValueClick: Among other claims, the
FTC alleged that ValueClick used emails
with deceptive subject lines to drive
consumers to websites (March 17,
2008).
Disgorgement of gross proceeds FTC
settlement with Kodak Imaging
Network: Primarily based on failure to
include an opt-out (May 2006).
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FTC CAN-SPAM Rule - Commercial or Transactional?
CAN-SPAM covers messages that are primarily “commercial” in
nature
When is a message transactional?
– Facilitates already agreed upon transaction or updates a
consumer about an ongoing transaction
– For example, an email regarding a delayed shipment (and no
commercial message) would be transactional
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FTC CAN-SPAM Rule - Commercial or Transactional?
What if the message is mixed purpose?
– The subject line must be transactional in nature
– “Transactional” content must be bulk of message and at
beginning of message
If it’s not transactional, it’s almost certainly commercial, and it must
comply with CAN-SPAM.
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FTC CAN-SPAM Rules - How to Comply
Be careful of anything that could be misleading:
– Don’t use false or misleading header information
– “From” “To” and “Reply To” lines must accurately
identify the entity sending the message
– Don’t use deceptive subject lines
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FTC CAN-SPAM Rules - How to Comply
Must include a valid address for the sender
If unsolicited (without affirmative consent), identify the message as
an ad
– You do not need to use “ADV” in subject line
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FTC CAN-SPAM Rules - How to Comply: Opt-Outs
With Opt-Outs, think “EASY”
– Provide a “click here” mechanism or a valid
return email address
– Consumer can only be asked to visit a single
web page (no multiple click-throughs)
– Consumer must not be asked for any
information other than email address and optout preferences (that means no passwords)
Process opt-out requests within 10 BUSINESS
DAYS of receipt
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FTC CAN-SPAM Rules - How to Comply: Opt Outs
Opt-Outs need to offer a “do not send me any
commercial emails again” option
– Consider making that the 1st option
– Ok to offer other choices, such as:
– a menu of choices of types of emails to
receive
– email me less frequently
– This is your internal “do not email” list
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FTC CAN-SPAM Rules - How to Comply: Opt-Outs
Who is the consumer opting out from? The
“sender”
– Should be an opt-out from the entity that the
consumer understands to be sending the email
– Should match the entity that offered the opt-in or
otherwise engaged the consumer (if applicable)
– Ok to be separate division or line of business of
company
Must hold yourself out as the separate
division throughout the email sent
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FCC CAN-SPAM Rules - When does the FCC rule apply?
FCC enforces CAN-SPAM with respect to commercial e-mail
messages sent to mobile devices
FCC maintains a list of wireless domain names:
http://transition.fcc.gov/cgb/policy/DomainNameDownload.html
E-mail addresses must be scrubbed against this list
– Senders have 30 days from the date the domain name is
posted on the FCC site to stop sending unauthorized
commercial email to Internet addresses containing the
domain name
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FCC CAN-SPAM Rule - How to comply
“Express prior authorization” required before a commercial
e-mail may be sent to a mobile device
– Authorization through web site = recipient must input specific wireless
address
– FCC comments indicate online authorization using click wrap mechanism is
acceptable
– Authorization applies solely to person or entity seeking authorization and not
third parties (including affiliated entities)
Must provide users a means of opting out
Opt-out requests must be processed in 10 business days
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FCC CAN-SPAM Rule - How to comply
All requests for authorization must disclose that:
– Recipient is agreeing to receive commercial e-mails to wireless
device from a specific sender
– Recipient may be charged by wireless service provider for receipt
– Recipient may revoke his/her authorization at any time
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Send to a Friend
Very popular viral marketing tool -- but be careful of any
potential fraud claim
The email should truly be from the friend
– Consider any content you add to the email
– Consider whether the friend can include content
– Consider the “from” line – ideally, use
[email protected] or something similar
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REAL WORLD EXAMPLE
Hoang v. Reunion.com
Consumer class action under
California’s anti-spam statute was filed
against Reunion.com for allegedly
sending deceptive emails through a
“send to a friend” email invitation
program
Finally voluntarily dismissed (a sign the
case settled) in February 2011, after
nearly three years of contentious litigation
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Send to a Friend
Be very careful (and typically do not):
– use the information collected on a “friend” for any
other reason; if possible, delete it after the email is
transmitted to the friend
– use “send to a friend” mechanisms in connection
with marketing to children
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Send to a Friend – Sweepstakes, etc.
CAN-Spam applies if you provide any consideration or
value (even de minimus)
Make sure you are in compliance if you offer:
– additional entries in a sweepstakes
– coupons
– discounts
– rewards
– other direct benefits
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Coming Soon: Canada
Canada has published the Electronic Commerce
Protection Regulations (CRTC); it will likely take
effect in early 2013
Addresses “spam” and “other electronic threats”
– such as the installation of computer programs
and the alteration of transmission data, without
express consent
Unlike the United States, in Canada you will need
consent in order to send a commercial email
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Coming Soon: Canada
A commercial electronic message is any electronic
message that encourages participation in a
commercial activity, regardless of whether there is
an expectation of profit
Commercial electronic messages defined as
messages sent through any means of
telecommunications and include email addresses,
social networking accounts, and text messages
sent to cell phones
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Coming Soon: Canada
Generally, the sender will need to:
– obtain consent from the recipient before
sending the email or other electronic message
– include information that identifies the sender
– allow the recipient to opt-out at any time and at
no cost
More Information: fightspam.gc.ca
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E-mail Campaigns – Additional Red Flags
Sending e-mails on behalf of third parties & vice
versa
Purchasing e-mail lists from third parties
Managing Opt-ins and Opt-outs
Vendors
– Know your vendors and what they are doing for
you!
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E-mail Campaign Key Takeaways
Disregard the common perception that CAN-SPAM and
state anti-spam laws apply only to illegitimate companies
and “spammers”
Avoid anything that could be misleading
Err on the side of providing an opt-out
Keep accurate opt-out records and process opt-outs as
requested
Know and monitor what others are doing on your behalf
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Text Message Campaigns – Applicable Laws & Guidelines
Telephone Consumer Protect Act (“TCPA”) governs sending
of text messages
– Law is now clear: text messages are “calls” under the
TCPA
Mobile Marketing Association (“MMA”) Guidelines
– Not just “guidelines”- major carriers require compliance
– Opt-in requirements
– Required disclosures
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TCPA
Requires express consent prior to sending any text message
Typical methods for obtaining the required authorization include:
Web sign-up forms
Text-in to a designated shortcode
All material terms of the offer should be presented at the time of
authorization so that consent is adequate
Includes private right of action and statutory damages ($500 to
$1500 per text). This is heavily litigated.
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REAL WORLD EXAMPLE
August 2012: Heartland
Automotive Services Inc. (a Jiffy
Lube International franchisee)
agreed to pay between $35 million
and $47 million in cash and
coupons for services in order to
settle a class action lawsuit related
to a “special offer” text message
sent allegedly without consent.
In re JIFFY LUBE
INTERNATIONAL, INC.
TEXT SPAM LITIGATION
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REAL WORLD EXAMPLE
Timberland’s $8M Error
Text messages about Timberland sale sent
to thousands of consumers
Consumers did not opt-in
Class action settled Sept 2008 for
$7,000,000 in damages
Additional $1,750,000 to counsel
ALSO, Timberland must set up training and
compliance checks
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MMA: Requirements for Calls to Action
and Opt-in Management
There are specific disclosure and opt-in
requirements depending on the type of campaign at
issue:
–“Standard rate” or “premium rate” program?
–One time message or recurring message
program?
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MMA: Required Call to Action Disclosures for all Campaigns
– Identify the sender
– Describe the campaign and the frequency of the texts to be
received
– Include the opt-in key word, if applicable
– Include “MSG & DATA RATES MAY APPLY”
– Include “TEXT HELP TO <SHORT CODE> FOR HELP”
– Include any other material terms (e.g. carrier or device
limitations)
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MMA: Additional Disclosures
Additional Call to Action disclosures for recurring message
campaigns
– TEXT STOP TO <SHORT CODE> TO STOP
Additional Call to Action disclosures for premium rate campaigns
include:
– The applicable fees (must be in the first line of the call to action)
– The subscription term (should not be longer than one month)
– Any disclosure that could affect the functionality, features or
content (e.g. carrier or device limitations)
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The Opt-In Process
No text should be sent unless the consumer opts-in
– Single Opt-in Required for Standard Rate Campaigns
– Double Opt-in Required for Premium Rate Campaigns
Double Opt-in requires consumer reply back to the text message indicating their
desire to opt-in, e.g. “Reply YES to opt-in”
– If no response is received, there is no opt-in: DO NOT send any further text
messages.
Confirmation message required for Premium Rate campaigns and Standard Rate
Recurring Message campaigns
If eighteen (18) months elapse without sending a text, the opt-in expires
The opt-in applies only to the specific campaign for which it was received
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Additional Message Requirements
MMA has specific requirements for Confirmation Texts (e.g.,
“welcome” texts)
Recurring Messages have additional requirements including sending
monthly reminders that include information on fees, if any, and that
“msg & data rates may apply”
Consider Recycled Numbers
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The Opt-Out Process
The opt-out instructions must use the word “STOP” in ALL CAPS to
indicate an opt-out (e.g. Reply STOP to cancel)
– But any response indicating a desire to opt-out (QUIT, CANCEL,
etc.) must be honored.
– Periodically scan (at least every thirty days) to look for these types
of opt-out requests, and then opt that consumer out
The opt-out must be automatic
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Recent Real World Examples
Class actions filed for sending final confirmatory message after consumer sends
opt-out request. It’s an MMA requirement but….:
Jaber v. NASCAR - First Amended Complaint filed on December 8, 2011
Moss v. Twitter - Settlement likely reached (a voluntary dismissal was filed, and the court
entered the dismissal on July 13, 2011)
Ibey v. Taco Bell Corp. -- U.S. District Court for the Southern District of California dismissed
on June 18, 2012, holding that a single, confirmatory opt-out text message does not violate
the TCPA. But . . . At least one additional lawsuit filed since this dismissal.
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REAL WORLD EXAMPLE
Settlement of NBC (Apprentice) and FOX (American
Idol) Text to Win Sweepstakes Lawsuits
– Consumers could enter by sending a text message subject to a
$0.99 premium charge or by filling out a free online entry form.
– Plaintiffs argued that the sweepstakes were unlawful
(notwithstanding the free method of entry) because individuals
didn’t get anything of value for the money they paid to enter,
other than the opportunity to win prizes.
– Settlement: 5 year injunction barring them from offering
sweepstakes in which entrants must pay premium text message
charges without receiving something of comparable value to the
charges in addition to the entry.
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UPDATED FCC TCPA Rules
Adopted and released February 15, 2012. Most
provisions take effect 12 months later.
Found at: www.fcc.gov/document/fcc-stregthensconsumer-protections-against-telemarketingrobocalls-0
Likely not a big change for text messages
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UPDATED FCC TCPA Rules
The new rules make clear that you must have prior
written consent to send commercial calls/messages
through an automated dialing system or that are
prerecorded
– and text messages have been found to fall into that
bucket
Text messages always require prior consent since they
are received at a wireless number
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New FCC Rules: What is prior written consent?
FCC has confirmed that consent can be obtained in
compliance with the E-SIGN Act. This includes permission
obtained via:
– email
– website form
– text message
– telephone keypress
– voice recording
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New FCC Rules: What is prior written consent?
The requirements of the existing MMA Guidelines really
address these issues already
If you are complying with TCPA and MMA today (e.g., full
notice of what the consumer is signing up to receive and
from whom, with the consumer either texting in or writing
his/her number on a form and then confirming through a
double opt-in), you likely should be in compliance with
updated FCC TCPA Rules
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Text Message Campaigns: Additional Red Flags
Premium text message campaigns
Sweepstakes entries via text
Campaign directed to children
Potential interaction with Do Not Call if company
does any direct phone marketing or obtains optins via telephone
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Text Message Campaigns Key Takeaways
Express, prior, written consent must be obtained for EVERY text
message sent to a consumer
There are detailed requirements for all text message campaigns;
they may not be fun but they must be followed
Offer a free method of entry in any text message sweepstakes for
both standard and premium rate campaigns
Keep accurate opt-out records and make sure to honor opt-outs –
no matter what term is used
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Ten Key Takeaways
1. Digital marketing: It may be the new frontier, but it’s not the
wild west.
2. Digital marketing is marketing—the same rules apply (and
some new ones too).
3. It’s a reverse lottery: many will play, few will lose, but those
who do will lose big.
4. Always know what your vendors are doing for you.
5. Do not rely on your vendors and partners—indemnification isn’t
always enough.
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10 Key Takeaways - Continued
6. Make sure you are in compliance with your own privacy policy and
privacy promises—sometimes the law allows more than your own
policies allow.
7. Do you have consumer consent? Do you need it? Can you get it?
8. Notice, notice, notice: If it's likely to influence the consumer,
disclose it, and disclose it prominently.
9. Remember that third parties have their own sets of rules that must
be followed (mobile carriers, third party platforms, etc.).
10. “Everyone else is doing it” is not the same as “this is a legally
compliant marketing campaign.”
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Questions?
Justine Young Gottshall
InfoLawGroup LLP
(312) 204-7199
[email protected]
www.infolawgroup.com
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