CITGO agreed to a $8.3 million TCPA class action settlement involving unsolicited text messages sent to contacts from a prior sweepstakes sponsorship.
Mr. Gottlieb alleged that participants in CITGO’s “text-to-win sweepstakes”, promoted at various “concerts, theme parks, sporting events, and retail gas stations”, received unsolicited telemarketing texts in violation of the TCPA.
The personal information provided by Mr. Gottlieb’s for purpose of entering the sweepstakes was later used for a text marketing campaign of the Club CITGO mobile application. According to Mr. Gottlieb, the campaign was an attempt to entice him make purchases from CITGO gas stations. He claims that CITGO sent similar illegal text messages to more than 90,000 other consumers without their consent.
Mr. Gottlieb had also registered on the National Do Not Call Registry, had never offered his phone number to CITGO nor consented to calls from the company.
TCPA Violations
- Violated the TCPA’s express consent provisions and used ATDS (automatic telephone dialing system) to sell its products and make offers.
- Invaded his personal privacy and disrupted his daily life with unsolicited calls.
TCPA Class Action Settlement
A total of $8.3 million of which $300,000 will go toward court administrative costs and fees. The plaintiff’s attorneys receive one third of the settlement amount. The remainder will be divided between the 93,000 individuals in the class action. It is estimated that each text message recipient will receive $56 per text.
This settlement highlights the class litigation risks to companies that collect consumer cellphone numbers for one purpose and use them for another. Under the TCPA (Telephone Consumer Protection Act) companies must obtain prior express consent from consumers before sending texts or placing calls using an ATDS to mobile devices. Consumers can sue for up to $1,500 per call or text for willful violations of the TCPA.
Prior Express Written Consent
Marketers, especially those using newer omnichannel means to connect with consumers, like text message marketing, may not be aware that their promotional texts are treated just like calls under the TCPA. Marketing is defined broadly under the law. To be TCPA compliant, you must get the consumer’s prior express written consent and using proper opt-in and opt-out language in the actual messages.
How Can My Company Avoid This?
So how can you protect your business against costly TCPA lawsuits? What could Bloomingdale’s have done differently?
1. Marketers need to understand the channels on which they are sending telemarketing messages and the laws governing those channels. Bloomingdales should have run their entire campaign by a TCPA specialist who could have told them that they needed specific opt-in language included in their Loyalist Program that explicitly states that they will be sending telemarketing messages.
2. Companies must get consent, express written consent, to send telemarketing or promotional text messages. Bloomingdale's should have obtained express written consent, using proper opt-in language before launching their text campaign.
3. Text marketing campaigns must include opt-in and opt-out language in the text message to be TCPA compliant (i.e. "Reply ‘STOP’ to opt-out of future messages").
4. Find litigators who may be hiding in your data. Identify known serial TCPA litigators and plaintiffs in your contact lists and weed them out before any inbound or outbound campaign to reduce the risk of being targeted for a TCPA class action lawsuit. If Bloomingdale’s had scrubbed their contact lists for known TCPA litigators, this class-action suit may never have happened at all.
