Do-not-contact registries trump SMS opt-ins in two states
Marketers of spirits, tobacco and other adult-oriented products beware: Even if consumers opt in to an SMS campaign and verify their age, you still might be breaking the law in two states.
That is because of do-not-contact programs and related laws in Utah and Michigan. 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 with those states.
"I realize that mobile marketing is what email marketing was over five years ago -- it's a fast-growing trend that many companies are taking advantage of," said Rachelle Milbank, head of corporate and public relations for Unspam Technologies Inc., Salt Lake City, UT.
"In reaching out to companies and marketers about these laws and how it may affect their practices, I have been also trying to work with different publications and associations to help get the word out," she said.
"Especially in Utah, we are trying to educate as many companies and service providers as possible and have already sent advisory letters to many of the major companies and marketers across the U.S."
There are more than 320,000 registered contact points in the state of Utah that include emails, mobile phone numbers, instant messenger IDs and fax numbers.
The registry comprises private, family, children and school domains. Anyone is allowed to register an address where a minor is present.
Utah and Michigan are the only states who have do-not-contact laws that apply to SMS.
One odd aspect of the laws enforcing these programs is that even if a consumer double-opts-in for an SMS campaign and verifies that he or she is 21 or older, marketers would still be in violation if that person previously submitted their mobile phone number to either state's do-not-contact list.
According to Utah's Web site, the criminal and civil penalties are alarming: "Marketers who fail to comply with the law face potential felony charges and civil and criminal penalties from $1,000 to $5,000 per message sent in violation of the law.
"Civil suits may be filed by the Utah attorney general, the Utah Division of Consumer Protection, Internet service providers, and parents on behalf of their children."
Marketers that want to ensure that they don't run afoul of the law can visit http://www.RegistryCompliance.com.
To scrub consumer databases, in Utah it costs a half-cent per address or number, while in Michigan it costs 0.7 cents per address or number submitted.
"I want to make sure anyone and everyone who may be affected by the laws are taking a proactive stance to assure their compliance with the state," Ms. Milbank said. "We understand that these laws can slip under the radar, but that should not give a company the excuse to not obey the state laws.
"Even though these laws only pertain to ?adult-oriented' products and services, the industries are huge and need to know that this is not just a do-not-contact email registry, but an SMS one too," she said.
"To tell you a little bit about the laws pertaining to marketers, sending even one message to a registered address or phone number could result in criminal liability and substantial civil fines for any company whose product is being advertised, any service provider who assists in sending the message, as well as any individual who actually authorizes or sends the message."
This is the case even if, at some other point, the individual had purportedly opted-in to receiving the solicitations.
A registration on the Utah registry trumps any request that the individual has made elsewhere, according to Unspam Technologies.
So, even if someone opts in to receive messages, if their address is registered with the state, it is a violation of the laws to send them messages.
"This is what makes the laws so unique and why many companies should know the laws cover both solicited and unsolicited advertisements," Ms. Milbank said. "There are a lot of scenarios that could go against companies and we are trying to make sure they are aware of them."
That means age verification and getting a consumer to sign up with a physical address, text message or area code does not always keep a company safe from sending to a registered address.
"These do-not-contact programs weren't created in reaction to something bad or any specific SMS campaigns, it was more of a proactive effort to protect consumers," Ms. Milbank said. "My main focus is community and corporate outreach, working with different organizations to get the word out and let people know that the state program exists.
"We've been publicizing them for the past year and we've had a 300 percent increase in registration numbers in Utah," she said.
"We're working with the State Attorney General's office and reaching out to service providers and other people in the industry who are affected by these laws to help them learn how to move towards compliance with the state programs."
An SMS marketer's perspective
"Until now, the media focus has been on online adult content," said Dave Everett, cofounder/CEO of KaOoga, Newton, MA. "I have heard rumors of such laws expanding into the mobile industry, but because SMS marketing is still in its infancy, it is difficult to keep track of laws that may be implemented under the radar.
"The do-not-call list is an interesting way to help protect minors from adult content," he said. "This particular format may be impossible for SMS marketers to keep up with, as the lists will constantly be changing."
As the laws enforcing these lists prove, ignorance isn't always bliss.
"Marketers may violate these laws without even knowing and put their clients in jeopardy," Mr. Everett said. "But, with a few adjustments, lists like these may be the only chance regulators have to achieve their goal.
"SMS is becoming the perfect avenue for a beverage, tobacco or gambling company, because it can create an instant call-to-action with measurable results," he said. "Marketing their products in an appropriate way to avoid interaction with minors is going to be a huge challenge as time goes on."
Adult content is probably going to become the next big battleground for regulators.
For the record, KaOoga wanted to make it clear that it does not associate its brand with any pornographic-related materials.
"Porn, alcohol, tobacco and gambling are all billion dollar businesses, so even if laws do get passed nationwide, people like Larry Flint will probably always find loopholes," Mr. Everett said.