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FCC Order Makes Acknowledging Text Opt-Outs Even Riskier

This week, the Federal Communications Commission (FCC) issued an order covering the same issue, but with a key limitation that creates a serious legal risk every time a marketer acknowledges an opt-out request with a confirmatory text.

Over the summer, we reported on a lawsuit, Ibey v. Taco Bell Corp., decided June 18, 2012 in the Southern District of California in which class action claims over a text message confirming receipt of an opt-out request were dismissed. This week, the Federal Communications Commission (FCC) issued an order covering the same issue, but with a key limitation that creates a serious legal risk every time a marketer acknowledges an opt-out request with a confirmatory text.

The issue arises when a consumer requests that a marketer stop sending promotional text messages, and the marketer replies with a text saying something to the effect that the opt-out request has been received and no further messages will be sent. Aggressive class action plaintiffs have claimed that such confirmatory texts are independent violations of the Telephone Consumer Protection Act (TCPA), which expose the marketer to potential $500 per-text penalties in addition to penalties for any earlier text messages sent by the marketer.

The Ibey ruling took the sensible approach that a "single, confirmatory text message did not constitute unsolicited telemarketing [and did] not appear to demonstrate an invasion of privacy contemplated by Congress in enacting the TCPA." The ruling explained that "to impose liability under the TCPA for a single, confirmatory text message would contravene public policy and the spirit of the statute-prevention of unsolicited telemarketing in a bulk format."

However, on November 26, 2012, the FCC scaled back the Ibey ruling by holding that the confirmation text is only legal if the marketer initially had obtained prior express consent from the consumer. The FCC made clear that: "our ruling applies only when the sender of text messages has obtained prior express consent."

The FCC exempted only those texts: 1) that merely confirm the consumer's opt-out request without including any marketing or promotional information or an attempt to convince the consumer to reconsider the opt-out decision; 2) that are the only additional message sent after receipt of the opt-out request; 3) for which the sender previously had the recipient's prior express consent to send texts to; and 4) which are sent within five minutes of receipt of the opt-out request. "If it takes longer," wrote the FTC, "the sender will have to make a showing that such delay was reasonable, and the longer this delay, the more difficult it will be to demonstrate that such messages fall within the original prior consent... Circumstances that deviate in material ways are unlikely to be encompassed by that consent."

TAKE AWAY: The FCC's order does not protect confirmatory texts unless there is valid prior consent and the confirmatory text is sent within five minutes of the opt-out request. In the real world, litigation often arises where there are disputes about the validity of the original consent. Given that plaintiffs can double their recovery by showing there was invalid consent and a delayed receipt of the confirmation of the opt-out request, marketers who send out automated text messages may wish to reconsider any policy of acknowledging opt-out requests. The law requires that opt-out requests be honored, but there is no requirement that they be confirmed. There seems to be no business upside to texting someone just told you he or she does not wish to receive texts; the FCC's ruling has now created a $500 per-text downside if it turns out the initial consent was invalid or the confirmation text was delayed by more than five minutes.