According to a recent JD Power study, when dealers text their customers, customer satisfaction increases. Dealers using text messages are getting ahead of most of their competitors and are creating more satisfied customers. Luxury dealers use email and text messaging more frequently than mass market dealers (25% and 21% of the time vs. 17% and 15% of the time, respectively), so mass market dealers have an opportunity to increase engagement through these channels.

But do you know the rules under the Telephone Consumer Protection Act (TCPA)? Dealers not getting the proper written permission to communicate via text can find themselves in class action lawsuits.  

Rules for Phone Calls/Text Messages from TCPA

  • Autodialed calls – defined as a phone call involving a live person or pre-recorded message, that is placed using an “autodialer,” or automatic telephone dialing system, that can (or can be modified to) produce, store and call telephone numbers using a random or sequential number generator. The definition of an “autodialer” is incredibly broad – much more so than you would think.
  • Robocalls – defined as a phone call that uses an “autodialer” system to deliver a pre-recorded telemarketing message.

If you are doing these types of telemarketing calls or have allowed a vendor to do so on your behalf, you need express written consent from the consumer.

  • Consumer consent must be unambiguous:
    • consumer must receive a ‘clear and conspicuous disclosure’ that he/she will receive future calls that deliver autodialed and/or pre-recorded telemarketing messages on behalf of a specific advertiser;
    • the consent must expressly indicate that the calls will be for “marketing purposes;”
    • that his/her consent is not a condition of purchase; and
    • he/she must designate a phone number at which to be reached (which should not be pre-populated by the advertiser in an online form).

NOTE: the established business relationship exemption no longer protects you or relieves you of the written consent requirement.

  • Dealers may not be using pre-recorded calls to contact consumers, but they must determine if they are using software or systems that meet the definition of an Automated Telephone Dialing System (ATDS) under the new rules.
  • The TCPA definition of ATDS may cover computers used to make or assist in making telephone calls, which means the FCC may consider ANY telemarketing phone call made using such a system to be improper under the TCPA, unless you have the consumer’s prior express written consent.
  • Since October 16, 2013, prior written consent (expressly for marketing purposes) is required for all autodialed and/or pre-recorded calls/texts sent/made to cell phone and pre-recorded calls made to residential land lines for marketing purposes.
  • Compliance with the E-SIGN Act satisfies this requirement, meaning that electronic or digital forms of signature are acceptable (i.e., agreements obtained via email, website form, text message, telephone key press or voice recording).
  • The TCPA applies to both voice and SMS or “text”messages, if they are transmitted for marketing purposes.
  • Overview of recent class action lawsuits related to “ringless voicemail” marketing without prior express written permission from the customer violates the federal Telephone Consumer Protection Act (TCPA); recommend:
    • Dealers to review dealership privacy consent forms, both sales and service, to ensure compliance with the texting requirements under TCPA, which restricts telephone solicitations and the use of automated telephone equipment.
    • Although the issue has not been definitively decided, all signs/court opinions suggest that it is.
  • Be aware that as of July 1, 2018, Florida law expressly prohibits a ringless voicemail message to any one that has previously communicated to the dealer that they do not wish to receive calls or texts
  • The TCPA requires dealers to have written permission (expressly for marketing purposes) prior to sending marketing messages (either themselves or through a vendor on their behalf) via an “automatic telephone dialing system” regardless of a prior business relationship, this includes texts
  • There are two major issues presented: 
  1. Is the text a marketing message; and
  2. Are you using an automatic telephone dialing system.
  • If the answer to both questions is yes, you need to have express written permission from the customer prior to the first text
  • Is the text a marketing message
    • Unless you are texting to say “your car is ready for pickup,” it probably is a marketing message
    • This is likely the case even if the first text is, “can we text you”
      • Why else would you be sending that text other than to market?
  • Are you using an automatic telephone dialing system
    • The truth – most dealers do not know
    • An automatic telephone dialing system is any equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and, to dial such numbers (or can be modified to do so even if it has not been so modified).
  • What should you do:
  1. Do not take your vendor at its word that it is not using an automatic telephone dialing system
  • Get an agreement to indemnify you against TCPA claims, or at the very least are presentation and warranty in the contract with the vendor that the equipment used is not an automatic telephone dialing system as defined by the TCPA.
  • Get express written consent from customers prior to sending a text message.

“The best part of text message (SMS/MMS) marketing, besides the high ROI, is that it is permission based. The recipient must be the one to take the action to enter into your text message program before you ever send them a text. This can be done via a web-based opt-in or by the mobile user sending a text to a short code with a specific “keyword” in it that indicates permission to receive messages.”

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