Texas’s amended telemarketing registration law takes effect on September 1. Although the law is not new, the legislature expanded it to apply to text messages. Under Texas’s existing law, a company that makes telephone solicitations to or from Texas must obtain a registration certificate for each business location where it makes those telephone solicitations. Until now this requirement applied to outbound calls, but beginning September 1 it will also apply to outbound marketing text messages.
Certain types of entities and telephone solicitation activities are exempt from the registration requirement, such as communications soliciting food sales; soliciting businesses to purchase items for resale; soliciting former or current customers; and telephone solicitations for purchases that will be completed at in-person sales presentations.
New Compliance Obligations for Businesses Using Text Message Marketing
In addition to expanding the definition of telephone solicitation to include outbound text messages, the amended law also expands the remedies available to consumers. Currently, enforcement is primarily through the attorney general, who may seek civil penalties, and through a limited private right of action for individual consumers.
Beginning September 1, consumers will also be able to bring lawsuits under the Texas Deceptive Trade Practices Act (DTPA), which will make it easier for class action plaintiffs to bring claims, as they will no longer need to notify a Texas agency before filing suit. As a result, companies that fail to comply with requirements such as registration, call time restrictions, and honoring opt-out requests can more easily be sued by consumers. Consumers will also be able to recover damages for each violation and can bring repeated actions for ongoing or repeated violations.
Civil Penalties, Class Actions, and Rising Litigation Risks in Texas
Civil penalties will depend on the specific provision violated and range from $500 to $5,000 per violation. Multiple violations can occur in a single text message, and therefore penalties can add up quickly, with companies potentially facing millions of dollars in penalties for a single campaign. Given these changes, we anticipate a significant rise in private telemarketing litigation in Texas.
Texas is not alone—many other states have registration requirements on the books. And Texas’s telemarketing law, as well as other state telemarketing laws, imposes additional requirements on telemarketers, including maintaining a written Do-Not-Call policy and honoring opt-out requests; observing state and federal calling hour restrictions (the federal Telephone Consumer Protection Act (TCPA) prohibits making calls or sending texts to consumers outside the hours of 8 am to 9 pm, but many states have stricter requirements); and refraining from calling or texting telephone numbers on the federal Do-Not-Call Registry and state Do-Not-Call lists, unless an applicable exemption exists. As in Texas, violations of other state laws are generally punishable by civil penalties.
