Key Take Aways
- All text messages are legally required under TCPA to allow recipients to opt out of future communications.
- Customers have to opt in to receiving promotions for sweepstakes or contests.
- Most states have consumer protection laws that require some kind of prior customer authorization to perform auto repairs.
- Dealerships need to be strident in protecting confidential data and personal privacy.
How Auto Dealers Can Avoid Potential High Fines From Text Message Marketing Lawsuits
Texting is a unique and powerful marketing tool for your auto dealership. It is also subject to unique regulations which if violated can have powerful financial consequences. Not text messaging certain information can get you just in much trouble.
While TEXT2DRIVE™ has the legal experience and background you can depend upon for worry-free customer text messaging, still you should be aware of the potential pitfalls of what you can’t do, as well as what you should do to avoid lawsuits.
Here are five of the worst scenarios where improper and often illegal text messaging, as well as failure to send, protect or document text messages, can expose your auto dealership to significant legal liability and fines as well as other unnecessary costs to your business.
1. No Option To Opt Out
One of the largest automotive retailers in the U.S., paid $2.5 million to settle a class action lawsuit for text messaging customers that violated the Telephone Consumer Protection Act (TCPA) for one simple error—failure to provide the ability to opt out of future text messaging. It wasn’t intentional, but rather a technical glitch that resulted in the opt out failure. But that isn’t a legal excuse. The settlement was significantly less than potential fines had the company lost the lawsuit.
All text messages are legally required under TCPA to allow recipients to opt out of future communications. Although TCPA was originally created to protect consumers from automated telephone telemarketing, or robocalls, the rules were subsequently applied to text messaging. Why? Because consumers pay to receive text messages on their personal cellphones, sent over a regulated cellular network. Penalties can range from $500 to $1500 for EACH message found in violation.
How To Avoid Opt-Out Issues With Text Marketing
To ensure you are legally compliant, use the double opt-in. As the name implies, this is double notification that a customer grants permission for you to send them marketing text messages. Basically, first you obtain permission from customers to send them text messages. This can be either a written or web form, or a recorded verbal consent.
Then you send a text message for customers to consent to further text messaging (usually customers can simply reply with either Y or N response). The double opt-out is a follow-up communication such as a text that confirms customer consent to receive text messages that may incur standard data fees, as well as options to determine frequency and type of text messaging.
2. Text Messages That Aren’t Legally Compliant
In addition to TCPA, there are myriad of state and federal laws as well as industry standards your text messaging must follow. One particular area of concern is sweepstakes and contests. While these are perfectly reasonable marketing programs, promoting them through text messaging can be problematic.
For one thing, your customers have to opt in to receiving promotions for sweepstakes or contests. In most cases, they must also indicate they are 13 years or older and legally eligible to participate in sweepstakes/contents. It gets even more complicated if the sweepstake or contest is sponsored in conjunction with alcoholic-related content, in which case age verification of 21 and over is required.
In addition, you need to distinguish between transactional messages that provide basic information and marketing messages that promote something or offer the customer something for participating. Customers must opt-in to receive either or both.
If you send a marketing message to customers who have specified they only want transactional messages, you could be legally liable. Jiffy Lube, for example, was fined $47 million for sending text messages offering a 45% discount on oil changes to customers who did not opt-in to receive them.
How To Avoid Texting Compliance Fines
Understanding the legal requirements of B2C text messaging is a necessity. TEXT2DRIVE™ is a software service led and co-founded by an experienced trial attorney fully conversant and current with these issues.
3. Not Texting To Perform Unauthorized Work
Most states have consumer protection laws that require some kind of prior customer authorization to perform auto repairs. If a customer brings a car in for service and you perform work that wasn’t authorized, the customer can refuse payment. This is not only potentially costly, as the dealer would have to absorb the time and expense of the unauthorized repairs, but it results in a poor customer experience, even if the repair is warranted, possibly resulting in a lost customer.
Even when you have the best interests of the customer in mind (“While doing the oil change we discovered your fan belt was frayed and ready to break, so we thought it best to replace it”), customers are completely within their rights to refuse payment. The Wisconsin Court of Appeals, for example, ruled a consumer didn’t have to pay a Chevrolet Pontiac dealer $5,000 in repairs since they weren’t authorized.
How To Avoid Unauthorized Work Headaches
Work orders authorizing repairs typically have a box where a customer can indicate that an additional repair can take place below a certain dollar amount, or that they need to be called to authorize any additional repairs. Even so, people tend not to read before they sign, and even though they may checked off a pre-authorization, they might not understand what they did (or they may pretend to not understand).
In any event, you get into an argument with the customer you’d rather not have. Here’s how you make sure you avoid it. Text the customer that you’ve identified additional issues and request authorization to proceed. It’s quick, it’s simple and it’s verifiable. This of course assumes the customer has properly opted in to receive text messages (see #1 above).
Plus, with TEXT2DRIVE™ you can even text an image or video to prove that the repair was necessary to begin with.
4. Employees Texting With Their Own Cell Phones
So your Service Manager Jim text messages customer Jill that her car service is complete. He uses his personal cell phone to do this. Jill thinks Jim is kind of cute and later texts him back an invitation to have a drink along with a picture of her at the beach. Jim’s wife doesn’t appreciate this. Nor does Jim. But Jill for some reason keeps texting him about topics not related to work on her car.
Today more than ever we all need to be strident in protecting confidential data and personal privacy. In June 2017, cybercriminals were able to obtain dealership data, including VIN numbers and owner information, used to disguise stolen cars.
Don’t risk losing valued employees as well as incurring unnecessary costs to recruit and train replacements in a highly competitive labor market. Not to mention the consequences of exposing your own private business information or the personal data of your customers.
How To Avoid Personal Exposure With Text Messaging
TEXT2DRIVE™ is the only text-messaging platform that provides auto dealers complete privacy protection. Customers never see the cell phone numbers of your employees as well as any of their personal data. You and your employees can be confident that the only thing customers can access is their own information, not that of your employees or your dealership.
5. Collecting & Documenting All Phone Communications
Even while we rely primarily more and more on electronic communications, a fully documented “paper trail” is still pretty important if you are involved in any kind of legal action or if an employee leaves your dealership.
Trying to find and follow this paper trail on various cell phones can be frustrating, time consuming and expensive, not mention what the customer or potential customer might think. Failure to find exactly what you need to protect your business could result in legal liabilities you otherwise could have avoided if you knew where and how to look.
How To Avoid Messy Documentation When Text Messaging
The TEXT2DRIVE™ Dashboard provides a quick and easy top-down view of all dealership text messaging and voice communications. All internal and external communications are securely stored, archived and easily searchable—even when employees are no longer with your dealership. Find what you need when you need to find it. No trailblazing required.
The Best Text Marketing & Sales Software For Auto Dealerships
The TEXT2DRIVE™ text-messaging platform is a Software as a Service (SaaS) that meets all federal regulations, protects privacy, unshackles employees from their desks, keeps all voice & text communications under one hood, and helps you avoid these five mistakes.
Developed specifically for the business needs of your dealership’s sales and service departments. We provide the technical and legal expertise, so you can confidently focus on what you do best, selling cars and servicing customers.