2015 GNYADA MEMBERSHIP DIRECTORY

HOT TOPICS 2015 GNYADA Membership Directory

TEXTING CUSTOMERS RISKY FOR DEALERS By Randy Henrick

As your customers become comfortable with communicating with you via text messaging, dealers may be tempted to use texting to market and advertise products and services. But texting is considered a form of telemarketing and the rules on obtaining consents for selling via texting have changed dramatically over the past few years. Nowadays, you must go above and beyond such things as verbal consent and having “established business relationship.” Potential Trouble If a customer brings his or her car in for service and asks to be texted when the job is complete and his or her car is ready for pickup, that’s a transaction call and the consumer just giving their cell number with the repair order is sufficient. However, adding text about additional services their vehicle needs or special offers, is considered telemarketing and that requires express written consent.

Potential Damages Damages range from $500 to $1,500 per text violation, which can

be asserted in a class action without a cap on liability. A large automotive dealer group recently settled a claim for $2.5 million—the lawsuit contended it did not have prior written consents for text messaging. The settlement consisted of $175 fine for each text, increasing to $500 if the customer had opted out, $10,000 to the named plaintiff, and $600,000 for the plaintiff’s attorney’s fees. Best Practices Communicate via text with your customer only to the number the customer authorized and only to provide information, not to sell or promote special offers. Use a standard smart phone to text one by one (to avoid autodialing/telemarketing) and you should be safe. Avoid using a PC or a phone that can autodial multiple number and don’t use a prerecorded message. You could be liable for violating the FCC rule.

Randy Henrick is Associate General Counsel and lead Compliance Counsel for Dealertrack Technologies, Inc. This article is intended for information purposes only and does not constitute the giving of legal or compliance advice to any person or entity. Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on your particular situations from a knowledgeable attorney or compliance professional licensed to practice in your state.

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