TCPA violations and fines: How to avoid costly penalties for unwanted communications

January 22, 2024

As long as somebody has given their consent to receive your texts, you’re sending appropriate content, you’re messaging minimal amounts, and you’re texting during daytime hours, your business is likely operating legally.

That said, if you break texting laws even once, you can face fines anywhere between $500 to $1,500 for every single text you’ve sent illegally. The Federal Communications Commission (FCC) can also impose fines of up to $10,000 per unauthorized instance through the Telephone Consumer Protection Act (TCPA).

Many potential lawsuits are due to businesses not getting express written consent from contacts before texting them promotional messages. Texting contacts without their consent and/or buying contact lists to text is illegal.

The easiest way to avoid such violations is to get consent from every contact before you send them any text messages.

In this post, we’ll explore how you can prevent TCPA fines, violations, and penalties. By the end of the post, you’ll understand exactly what constitutes a texting violation and what exceptions apply.

⚠️ This advice is for informational purposes only and is neither intended as nor should be substituted for consultation with appropriate legal counsel and/or your organization’s regulatory compliance team.

Let’s first clarify what a fine looks like.

Typically, TCPA penalties require you to pay $500 for each text. The court can triple that $1,500 for every instance if it determines that the violation was willful or knowing. The determination of whether a violation is willful or knowing is made based on the specific circumstances of each case.

So…

The TCPA is designed to cut down on scammers and nuisances. Below are three main TCPA violations every company should be aware of to avoid being classified under these categories:

If a business, without prior consent, calls a cell phone using automated dialing or sends messages for marketing purposes, that constitutes an obvious TCPA violation. With no exceptions, you can only text someone who has given you consent.

There are different types of consent depending on the communication context. Express written consent is required for compliant promotional messaging.

For businesses to call residential numbers with artificial or pre-recorded voice technology (including AI) for marketing purposes, they must have prior express written consent of the called party. The consent must be clear, unambiguous, and specifically outline the types of communications the individual is consenting to receive.

Business texting falls within these definitions because the TCPA defines platforms like SimpleTexting as “autodialers”. Again, get consent before you text to avoid costly TCPA penalties.

It’s illegal to call anyone who has opted out of phone calls by registering on the federal Do Not Call Registry. This is subject to certain exceptions, such as the called party’s prior express invitation or an “established business relationship”.

If the telemarketer hasn’t done business with the consumer in the last 18 months, then they don’t have any established business relationship. This means you can’t call prospects or leads that are part of this registry.

Cold texting any contact without their prior consent or business relationship is illegal. Therefore, while you cannot text contacts whose numbers are on the Do Not Call Registry, that doesn’t mean you can text anyone whose number is not on the Registry.

You cannot legally text contacts without their prior consent.

For emergency text messages though, there are a handful of situations where a business can send texts even when they haven’t formally asked for consent.

While the TCPA primarily regulates marketing and advertising communications, particularly those involving auto-dialed or pre-recorded calls and texts, exceptions apply to specific informational messages.

These exceptions relieve you from the stringent consent and opt-out requirements of the TCPA.

Here are some key examples:

• Banks and financial institutions: Messages about account updates or urgent security alerts from financial institutions are typically exempt under the TCPA.
• Schools: Critical information sent by schools regarding closures, health risks, or attendance matters are included in these exemptions.
• Utility companies: Service-related updates, including information about outages or infrastructure upgrades from utility companies, are also exempt.
• Healthcare providers: Communications such as appointment confirmations, reminders, and essential medical instructions or results from healthcare providers fall under this exemption.
• Pharmacies: Prescription notifications sent by pharmacies are allowed without needing express consent from the recipient.

Despite these rare exceptions, it’s in your best interest to capture consent before you text, especially if you ever wish to send other kinds of messages. All other text communications are illegal without prior consent.

Let’s see what TCPA violations look like in practice by reviewing several businesses that had to face the consequences of not adhering to the FCC’s rules.

Whether you’re an individual, organization, brand, or marketing agency working on behalf of a brand, these examples will highlight how important it is to follow TCPA regulations to prevent similar penalties from impacting your business.

The Moser v. FCC case stands as a significant milestone in the legal landscape surrounding telemarketing and the Telephone Consumer Protection Act. This case marked one of the initial challenges by telemarketers to the newly implemented legislation. 

The outcome was pivotal, as the court upheld the constitutionality of the law and its industry restrictions. This decision set a precedent affirming the government’s authority to regulate and restrict certain telemarketing practices to protect consumers from unwanted communications.

According to Wiley Law, “[T]he FCC alleged that Kenneth Moser and his telemarketing company, Marketing Support Systems, violated both the Telephone Consumer Protection Act (TCPA), the law that limits automated calling without adequate consent, and the Truth in Caller ID Act, the law that regulates unlawful CallerID spoofing.” The outcome for Kenneth Moser was a $10 million fine.

Takeaway: Get prior express consent before communicating with contacts. Avoid sending prohibited content.

An iconic legal battle unfolded in 2014 when Capital One found itself entangled in a class action lawsuit, resulting in substantial penalties. The lawsuit alleged that Capital One had violated the TCPA by employing an automated dialer without obtaining proper consent.

The outcome was a staggering $75.5 million in penalties, underscoring the serious consequences that businesses could face for non-compliance with TCPA regulations.

Takeaway: Get prior consent before communicating with contacts.

The 2017 case involving Dish Network serves as a stark reminder of the substantial penalties that companies may face for violations of the Telephone Consumer Protection Act. In this legal battle, Dish Network was ordered to pay a sum of approximately $341 million in damages for its alleged violations.

The essence of this class action suit against Dish Network revolved around accusations that the company deliberately called phone numbers listed on the national Do Not Call Registry. The Do Not Call Registry is a mechanism designed to give consumers the option to opt out of unsolicited telemarketing calls.

Takeaway: Get prior consent before communicating with contacts. Don’t call numbers on the national Do Not Call Registry.

The case involving Domino’s Pizza in 2013 further illustrates the legal consequences that businesses can face for unsolicited marketing communications under the provisions of TCPA.

In addition to unsolicited marketing calls, the court found that Domino’s Pizza had sent promotional texts without obtaining the necessary consent from the recipients. Domino’s Pizza reached a settlement of nearly $10 million in a class-action lawsuit.

Takeaway: Get prior express written consent before sending promotional messages.

Most recently, MedMen was accused of sending unsolicited text messages without obtaining the recipient’s consent. That’s a violation of Florida’s law FTSA (Florida’s Telephone Solicitation Act) law known as the mini-TCPA.

Thousands of people in the state received SMS texts they hadn’t signed up for resulting in over $5 million in damages for MedMen.

Takeaway: Get prior consent before communicating with contacts.

Another similar case involving Highmark Health Options (in the insurance and services sector) involved unsolicited automated telemarketing calls.

In this instance, Highmark Health Options agreed to pay $1.85 million as part of a settlement to resolve the class action lawsuit alleging that the company contacted consumers with automated telemarketing calls without consent.

Takeaway: Get prior consent before communicating with contacts.

Gopuff was accused of breaching the Telephone Consumer Protection Act by purportedly sending unsolicited text messages to consumers, even after they attempted to opt out of receiving such communications. 

One customer, Bradley Stern, was one of the customers who kept getting the messages even after the initial law breach. He filed a class action seeking a trial by jury, the individual is requesting declaratory and injunctive relief, along with an award of statutory damages, on behalf of both himself and all members of the class.

Takeaway: Get prior consent before communicating with contacts. Stop contacting those who opt out.

Gerber Life Insurance Co. is under a class-action lawsuit in a New York federal court, accused of engaging in unsolicited and unlawful telemarketing practices to promote its life insurance policies. The plaintiff, Thomas Matthews, says that despite having his cell phone number registered on the National Do Not Call registry, he continued to receive these calls, constituting a violation of the TCPA.

Matthews contends that the calls, likely facilitated by an autodialer, led to phone line congestion and infringed upon his privacy. The class action aims to secure damages for U.S. consumers who experienced multiple unsolicited telemarketing calls from Gerber Life despite their presence on the Do Not Call registry.

Takeaway: Get prior consent before communicating with contacts. Don’t call numbers on the national Do Not Call Registry.

We recommend getting express written consent, no matter your business texting use case.

• Express written consent allows you to send promotional, informational, and conversational messages. A contact must opt-in by texting your number or manually checking a box on a form.
• Express consent allows you to send informational and conversational messages. A contact gives express consent when they provide their contact information directly related to a specific action, like booking an appointment.
• Implied consent allows you to send conversational messages. A contact provides implied consent when they initiate the conversation, allowing you to reply.

Express written consent should be obtained in response to a transparent and easily noticeable opt-in disclosure, confirming their agreement to receive marketing or promotional messages. Importantly, this agreement should mention if you’re using messages sent via an autodialer or artificial intelligence (AI).

Furthermore, you should be clear about how this agreement is strictly related to receiving text messages and is not contingent upon making any purchase. Make sure to add a note about how this is entirely voluntary.

Anything that might force contacts to give their consent (like deceptive consent checkboxes that are pre-checked, for example) can be classified as a TCPA violation. 

SimpleTexting provides tools to help you obtain TCPA-compliant express written consent like web forms.

Our embeddable web forms can be added to any website. Just be sure to maintain your evidence of consumer consent. 

We even provide the option of enabling double opt-in. This requires the user to respond Y or Yes to confirm that they want to subscribe. Although not yet legally required, double opt-in is an extra security layer that will protect both you and your customers.

If you like to keep things old-school, you can always use a printed form to use within a physical location. You’ll then have to manually input permissions into your preferred marketing tool. Just make sure to store all the paperwork safely in case you need to refer to it later.

When it comes to navigating the complexities of the Telephone Consumer Protection Act, consider these suggestions to align your communication strategies with all SMS compliance requirements:

1. Seek express written consent: Always get explicit, written consent from individuals before sending them any marketing messages. Consent should be clear and specific about the exact type of messages they will receive.
2. Maintain an up-to-date contact list: Regularly review and update your contact list. It’s a good practice to remove numbers that have opted out or are no longer in service. This will save you money and give you a more realistic look at your stats. (Note: SimpleTexting features self-cleaning lists that automatically detect dead numbers and mark them invalid or unsubscribed.)
3. Offer an opt-out mechanism: Always include an easy and clear way for recipients to opt out of receiving further messages. (Note: With SimpleTexting, your contacts can text “stop” to your number to automatically be removed from your list.)
4. Respect the National Do Not Call Registry: Regularly check the National Do Not Call registry and ensure that the numbers on your contact list aren’t part of it. This step can mitigate the risk of unintentional violations.
5. Be mindful of timing and amounts: Sending texts too early in the morning or too late at night could potentially lead to complaints and violations. Sending messages during prohibited hours, can result in legal consequences, including fines and potential lawsuits. Also, avoid sending too many messages per day — no more than three. In most cases, one text every other week is what your contacts want.
6. Keep records of consent and communication: Tracking how and when consent was obtained and a log of all communications sent is invaluable for verifying compliance in case of disputes or inquiries.

Remember: These are general suggestions, and we recommend regularly consulting with legal experts familiar with TCPA regulations to ensure full compliance with the evolving laws and guidelines.

Ensuring compliance with the TCPA is paramount for any businesses engaging in text message marketing. When individuals subscribe to your texts, they must provide prior consent.

This consent should follow a transparent disclosure, clearly stating that the messages they are agreeing to receive are:

• marketing or promotional at their core,
• sent via an autodialer or through artificial intelligence, and
• not contingent upon making any purchase.

Beyond obtaining consent, businesses should also uphold the transparency and conditions outlined during the consent process. This not only protects you from legal repercussions and heavy fines but also fosters positive relationships with consumers by respecting their preferences and privacy. 

Maintaining a thorough understanding of TCPA regulations and implementing stringent compliance measures is essential for any entity engaging in text-based marketing communications.

Failure to adhere to these requirements can result in severe consequences, with heavy TPCA fines ranging from $500 to $1,500 per violation being the most common punishment for non-compliance.

When in doubt, remember that any unsolicited calls or texts, especially those lacking the necessary consent or containing misleading information, can qualify as TCPA violations.

⚠️ This advice is for informational purposes only and is neither intended as nor should be substituted for consultation with appropriate legal counsel and/or your organization’s regulatory compliance team.