Mobile marketers OK proposed New Jersey bill to ban unsolicited SMS

CEOs of leading SMS marketing firms signalled their approval of proposed legislation from New Jersey to ban unsolicited text-message advertisements to residents of the Garden State.

State senators Joseph Vitale and Sean Kean are backing a bill that curbs the sending of unsolicited ads via SMS to New Jersey residents if such text messages will cause recipients to incur a telecommunications charge or a usage allocation deduction. That restriction is fine by some.

?I think it's great and don't see a problem,? said Tim Miller, president of SMS marketing firm Sumotext, Little Rock, AR. ?Every legitimate provider is going to have an opt-in record on file, i.e. a mobile-originated message where the consumer joined by texting a keyword to a short code.?

Mr. Miller said this bill, if voted into law, may only affect marketers that import lists into their system ? something they should not be doing in the first place.

Guardian state
The New Jersey legislation defines an unsolicited advertisement as any message sent without the prior permission of the recipient to encourage the purchase or rental of, or investment in, merchandise and services.

The bill says prior permission of the recipient to send an advertisement via SMS may be granted only by the recipient. That permission includes the number to which to send the text message ad.

Violators of the bill would face fines put forth in New Jersey?s Consumer Fraud Act.

First offenses could cost offenders as much as $10,000. Fines for subsequent violations could reach $20,000.

If the violators had knowledge or should have had knowledge that the victim is a senior citizen or someone with disability, they could be fined as much as $30,000.

Under the bill, marketers who send only one such text message during a 12-month period would not be liable.

For legitimate marketers, the bill would require them to give consumers the option to block all incoming and outgoing text messages.

?It?s too early to tell whether the New Jersey bill will pass, but its introduction demonstrates that regulators are paying close attention to mobile marketing,? said Gonzalo Mon, Washington-based attorney at Kelley Drye & Warren

?Regardless of whether or not the bill passes, however, mobile marketers would be well-advised to get express consent before sending text messages to consumers,? he said. 

?Unless they get consent, marketers are likely to face complaints, lawsuits, and significant settlement costs.? 

Gary Schwartz, president/CEO of Impact Mobile, Toronto, said the mobile market has done a good job of self-regulation and any initiative that works to protect consumers from unwanted text is positive.

The bill proposed appears very fair and should be applauded by legitimate marketers in the mobile industry, per the executive.

"For a legitimate marketer, it ensures that their message will be welcomed and received by the consumer, thus maintaining the integrity of the one-to-one dialogue between the brand and the consumer," Mr. Schwartz said.

Gateway, not get away
Meanwhile, Sumotext's Mr. Miller said if he were advising the senators he would add a couple of additional measures. He would require that all messages be sent over a short code, and not Web-based SMTP to SMS via the carriers' exposed gateways.

When messages are sent via SMTP and converted to SMS by the carrier, the consumer cannot respond with STOP or HELP to end the delivery.

Instead, Mr. Miller would require all messages to be tagged with "Reply STOP to opt-out."

Each of these suggestions are already required by the carriers and to date this has not been enforced by anyone.

New Jersey is not the only state restricting SMS usage.

Utah and Michigan in July passed do-not-contact programs. These state programs, which extend to SMS, dictate that marketers who advertise adult products and services such as alcohol, tobacco, gambling and pornography cannot market to any registered phone number or address in those states (see story).

Game for collaboration
Jared Reitzin, CEO of mobileStorm, Los Angeles, said sending unsolicited text messages is wrong and more annoying and costly than email.

With email consumers do not pay per message, Mr. Reitzin said. Also, email is not necessarily going to interrupt a consumer's day, whereas text messages can.

Indeed, Mr. Reitzin said mobileStorm wants to get involved in helping lawmakers ensure that the punishment fits the crime.

?It?s one thing if you are a single company sending messages and are not following best practices," Mr. Reitzin said. "It?s another when you provide a mobile marketing solution where thousands of companies are using your platform to send and receive SMS messages out by the minute.

?Don?t get me wrong, there are things we do to ensure that our clients practice opt-in messaging, but you would be surprised by how many people out there are always trying to game our technology," he said.

?We just want to make sure that if these spammers used our system to send the unsolicited messages we can work with the authorities to pass the violations through. These senators need to work with the mobile marketing providers since we are the ones sending large amounts of messages."

In recent years, consumers have filed a number of lawsuits against marketers that failed to get consent from consumers before sending them text messages, Kelley Drye's Mr. Mon pointed out. 

Earlier this year, for example, the Ninth Circuit Court of Appeals held that failure to get express consent from consumers could violate the federal Telephone Consumer Protection Act. 

Before that, another company agreed to pay $7 million to settle accusations of sending unsolicited text messages. 

?To avoid becoming a target of these types of lawsuits, marketers should consult with their legal counsel and review the Mobile Marketing Association guidelines for instructions on getting consent,? Mr. Mon said.

Please click here to download the PDF document of the New Jersey bill