and Text Message Campaigns. Justine Young Gottshall Partner, InfoLawGroup

Transcription

1 2012 and Text Message Campaigns Justine Young Gottshall Partner, InfoLawGroup

2 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 2

3 Campaigns Overview Spam isn t only bulk or junk mail! All commercial s 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 ) 3

4 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 4

5 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). 5

6 Real World Examples Balsam v. Trancos. Recent example of a private plaintiff case going forward because it alleged fraud affirmed by Cal Court of Appeal. Sender line found to violate CA statute because used fanciful names and domains that could not be found through WHOIS (Feb 2012). 6

7 Real World Examples, Cont. $2.9 million FTC settlement with ValueClick: Among other claims, the FTC alleged that ValueClick used s 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). 7

8 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 regarding a delayed shipment (and no commercial message) would be transactional 8

9 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. 9

10 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 10

11 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 11

12 FTC CAN-SPAM Rules - How to Comply: Opt Outs With Opt-Outs, think EASY Provide a click here mechanism or a valid return 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 address and optout preferences (that means no passwords) Process opt-out requests within 10 BUSINESS DAYS of receipt 12

13 FTC CAN-SPAM Rules - How to Comply: Opt Outs Opt-Outs need to offer a do not send me any commercial s again option Consider making that the 1 st option Ok to offer other choices, such as: a menu of choices of types of s to receive me less frequently This is your internal do not list 13

14 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 whom the consumer understands to be sending the 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 sent 14

15 FCC CAN-SPAM Rules - When does the FCC rule apply? FCC enforces CAN-SPAM with respect to commercial messages sent to mobile devices FCC maintains a list of wireless domain names: 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 to Internet addresses containing the domain name 15

16 FCC CAN-SPAM Rule - How to comply Express prior authorization required before a commercial 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 ten business days 16

17 FCC CAN-SPAM Rule - How to comply All requests for authorization must disclose that: Recipient is agreeing to receive commercial s 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 17

18 Send to a Friend Very popular viral marketing tool -- but be careful of any potential fraud claim The should truly be from the friend Consider any content you add to the Consider whether the friend can include content Consider the from line ideally, use [email protected] or something similar 18

19 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 s through a send to a friend invitation program Finally voluntarily dismissed (a sign the case settled) in February 2011, after nearly three years of contentious litigation 19

20 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 is transmitted to the friend use send to a friend mechanisms in connection with marketing to children 20

21 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 21

22 Coming Soon: Canada Canada has published the Electronic Commerce Protection Regulations (CRTC); will likely take effect in 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 22

23 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 addresses, social networking accounts, and text messages sent to cell phones 23

24 Coming Soon: Canada Generally, the sender will need to: obtain consent from the recipient before sending the 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 24

25 Campaigns Additional Red Flags Sending s on behalf of third parties & vice versa Purchasing lists from third parties Managing Opt-ins and Opt-outs Vendors Know your vendors and what they are doing for you! 25

26 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 26

27 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 27

28 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. 28

29 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 29

30 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? 30

31 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) 31

32 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) 32

33 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 33

34 Additional Message Requirements MMA has specific requirements for Confirmation (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 34

35 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 35

36 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) 36

37 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. 37

38 UPDATED FCC TCPA Rules Adopted and released February 15, Most provisions take effect 12 months later. Found at: Likely not a big change for text messages 38

39 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 required prior consent since they are received at a wireless number 39

40 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: website form text message telephone keypress voice recording 40

41 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 41

42 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 42

43 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 43

44 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 (& 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. 44

45 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. 45

46 Questions? Justine Young Gottshall InfoLawGroup LLP (312)