The “existing business relationship” (EBR) clause is an important concept in marketing regulations that can provide certain exemptions or allowances for contacting individuals, including through text messages. However, the application of the EBR clause varies depending on the jurisdiction and specific regulations involved. Today we will take a detailed look at how the EBR clause applies to texting under different legal frameworks:
Under the TCPA the Definition of EBR is An existing business relationship is defined as a relationship formed by a voluntary two-way communication between a person and a business, based on:
An inquiry, application, purchase, or transaction regarding products or services offered by the business.
The relationship must be recent, typically within the past 18 months for purchases or transactions, or 3 months for inquiries or applications.
Application to Texting:
For marketing texts, even with an EBR, you generally need prior express written consent. The EBR exception primarily applies to phone calls rather than text messages. However, for informational or transactional texts like order confirmations and account notifications, an EBR can allow these messages without explicit written consent, provided they are not promotional in nature.
The distinction between marketing and informational text messages is crucial for compliance with regulations. It is up to you to determine if your messaging is marketing or informational.
Here’s a detailed breakdown of each type:
Marketing Text Messages
Definition:
Marketing text messages are those that promote, advertise, or encourage the purchase of products or services, . Their primary purpose is to drive sales or increase brand awareness.
Characteristics include
Promotional Content – These messages contain content intended to persuade recipients to purchase a product or service.
Offers and Discounts – Includes special offers, discounts, or promotional deals.
Brand Awareness – May include information about new products, services, or events.
Generally, explicit consent from the recipient is required before sending these types of messages, even if there is an existing business relationship.
Some examples include:
Get 20% off your next purchase with code SAVE20! Visit our store today
Join us for our grand opening event and enjoy exclusive deals and giveaways.
Introducing our new product line! Check it out at [website link].
Informational Text Messages
Definition:
Informational text messages are those that provide useful information to the recipient without any intent to promote or sell products or services. These messages are typically transactional or service-related and aim to inform or notify the recipient.
Characteristics:
Service Updates: Notifications about account status, order confirmations, shipping updates, appointment reminders, etc.
Non-Promotional: Do not contain promotional content or attempts to sell products/services.
Operational: Often necessary for the operation of a service or the fulfillment of a transaction.
Consent Requirements: Consent for informational messages may still be required, but the thresholds can be different and more lenient compared to marketing messages.
Examples:
Your order #12345 has been shipped and will arrive on [date].
Reminder: Your appointment with Dr. Smith is scheduled for tomorrow at 3 PM
Your monthly statement is now available online. Please log in to your account to view it.
Key Regulatory Requirements
1. USA: Telephone Consumer Protection Act (TCPA)
Marketing Texts: Require prior express written consent. This means recipients must explicitly agree to receive marketing messages.
Informational Texts: Require prior express consent, which can be more lenient than written consent. Consent is often implied if the messages are necessary for the service or transaction.
2. EU: General Data Protection Regulation (GDPR) and ePrivacy Directive
Marketing Texts: Require explicit consent. Recipients must opt-in to receive marketing communications.
Informational Texts: Can be sent based on legitimate interest or performance of a contract, but must still respect the recipient’s rights and include opt-out options.
3. UK: Privacy and Electronic Communications Regulations (PECR)
Marketing Texts: Require prior consent, similar to GDPR. B2B communications have some flexibility, but individual employees’ personal numbers still require consent.
Informational Texts: Must be directly related to a service or transaction. Consent may be implied if the messages are necessary for fulfilling a service or contract.
Best Practices
1. Clear Distinction:
Ensure that recipients can easily distinguish between marketing and informational messages. Avoid mixing promotional content with transactional or service-related updates.
2. Obtain Proper Consent:
For marketing texts, always obtain explicit, documented consent. For informational texts, ensure that any implied consent is clearly related to the service or transaction through an existing business relationship.
3. Include Opt-Out Mechanisms:
Provide clear and easy ways for recipients to opt out of future messages, regardless of the type.
4. Respect Preferences:
Honor recipients’ preferences regarding the types of messages they wish to receive.
5. Regular Reviews:
Regularly review and audit messaging practices to ensure compliance with current regulations and guidelines.
Conclusion
Understanding the difference between marketing and informational text messages is essential for regulatory compliance and maintaining customer trust. Marketing texts require explicit consent due to their promotional nature, while informational texts, though still requiring some form of existing business relationship, are generally seen as necessary for providing services or fulfilling transactions. Clear consent practices, including opt-out mechanisms, are critical for both types of messages.
Regardless of compliance and best practices, there are always risks associated with any marketing outreach effort. There have been cases where defendants successfully argued that the text messages they sent were informational rather than marketing in nature, which impacted the outcome in their favor. Here are some notable examples:
Smith v. Blue Shield of California Life & Health Insurance Co.
Case Summary:
Facts: Blue Shield sent text messages to its members reminding them to get flu shots.
Issue: The plaintiff argued that these messages were unsolicited marketing texts and violated the TCPA.
Outcome:
Ruling: The court found that the text messages were informational, as they pertained to health benefits and reminders related to the plaintiff’s existing health plan. The messages were deemed not to be marketing because they did not promote a commercial product or service.
Impact: This case underscored the distinction between informational messages (health reminders) and marketing messages, favoring the defendant.
Ibey v. Taco Bell Corp.
Case Summary:
Facts: Taco Bell sent a single text message in response to a customer’s participation in a survey. The message was an acknowledgment of survey participation.
Issue: The plaintiff claimed this message was a marketing text and violated the TCPA.
Outcome:
Ruling: The court sided with Taco Bell, stating that the text was purely informational, acknowledging the customer’s survey participation and not promoting any product or service.
Impact: This ruling emphasized that one-time informational responses related to customer engagement are not considered marketing under the TCPA.
Friedman v. Massage Envy Franchising, LLC
Case Summary:
Facts: Massage Envy sent text messages to customers confirming their appointments.
Issue: The plaintiff argued that these messages were unsolicited marketing texts.
Outcome:
Ruling: The court found that the messages were purely informational, serving as appointment reminders rather than promoting any new services or products.
Impact:** This case reinforced the idea that messages necessary for the performance of a service (e.g., appointment reminders) are considered informational.
Key Takeaways from These Cases
1. Content and Context:
Courts will closely examine the content of the messages and the context in which they were sent. If the primary purpose of the message is to inform or remind the recipient about an existing service or obligation, it is more likely to be considered informational.
2. Relationship with Recipient:
Messages sent in the context of an existing business relationship that pertain to the service provided (e.g., health reminders, appointment confirmations) are more likely to be deemed informational.
3. Absence of Promotional Content:
The absence of explicit promotional content or calls to action related to purchasing additional products or services is a strong factor in determining that a message is informational.
4. Regulatory Guidance:
Compliance with regulatory guidelines, such as ensuring messages are necessary for the service, strengthens the argument that messages are informational.
Conclusion
In conclusion, defendants have successfully argued that certain text messages were informational rather than marketing, leading to favorable outcomes. The key factors in these rulings include the message’s content, context, and purpose, as well as the existing relationship with the recipient. Ensuring messages are clearly informational and devoid of promotional content can help in defending against TCPA claims.
Keep in mind, most of the TCPA rules are meant for consumer related outreach. However it does not mean just because we are reaching out for “business” purposes that we shouldn’t follow proper protocol and best practices.
It is up to you to determine if your messaging falls under the category of informational or marketing. If it’s informational in nature, your existing business relationship appears to cover you. If for marketing purposes, you will need opt in. Furthermore, it is recommended you have human intervention when executing these campaigns vs. using automated systems to “blast” out your texts. P2P Texting: Requires human intervention, which can exempt you from the strictest TCPA regulations related to autodialers.
Automated Blasts: Typically classified as using an autodialer, triggering stringent consent requirements under the TCPA. At PhonetiCall, we use a peer to peer (humans sending text) methodology to help our clients increase conversions and lower cost for subscription renewals, event registration, and content marketing programs.