This week, lawyers were given permission by a US Judge at a court in Seattle to bring a class-action law suit against Papa John’s Pizza for allegedly sending unwanted text messages to customers across the US. This allows the lawyers to bring the case for any number of plaintiffs. If the case is proven, the food chain faces a potential bill for damages of over US $250 million.
This is the latest in a stream of class-action cases brought against large US companies for sending spam text messages in contravention of The Telephone Consumer Protection Act. These appear to be becoming more and more costly. Most recently, the Jiffy Lube franchisee Heartland Automotive Services reached a settlement, in August 2012, offering to pay $47 million to recipients of its unwanted text messages. But this claim is five times that amount.
The Papa John’s case is a complicated one relating to the sending of 500,000 messages by Papa John’s franchises through a text messaging service called OnTime4U, in 2010 (see CNN Money for details).
According to the Judge’s opinion, the plaintiffs are seeking up to $500 per violation (the maximum allowed under the TCPA). This is considerably more than US courts have awarded to date.
In previous cases, where courts find for the plaintiffs or companies settle out of court, each recipient of the unsolicited messages has received up to $150 from Timberland; $175 from Simon & Schuster; $200 from Twentieth Century Fox and $250 from Burger King.
Regardless, the potential liability for sending texts to customers who have not specifically opted-in or continuing to send messages after they have opted out in the US is considerable.
As the lawyer representing Papa John’s customers says in this statement: “This should be a wakeup call to advertisers. Consumers do not want spam on their cell phones. If you do not have permission from your customers, do not send them text messages. It’s as simple as that.”
Opt-in SMS marketing can be a very powerful form of customer engagement when used correctly. Companies that don’t observe customers’ rights to privacy don’t just risk alienating customers, they also risk falling foul of the law. And not just in the US. The Mobile Marketing Association offers best practice guidelines.
After these cases against high-profile companies, and with the class-action lawyers circling like sharks looking for their next victim, is there any excuse for any company not knowing the rules and abiding by them?
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