Text Messaging Laws Every Business Owner Needs to Know

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In recent years text message or SMS marketing has become an important and extremely popular means for businesses to reach out to their customers. The increased vogue of text message marketing can be attributed to its high returns on investment (ROI). In 2021 the average ROI for text message marketing can be up to 500% if implemented properly.

Drawn by its high success rates, numerous marketers, including smaller businesses, have taken recourse to text message marketing to promote their products and services. By streamlining implementations many text messaging platforms have made it easy to send out thousands of messages with just one click.

Despite all its plus points, there are some concerns with SMS marketing as well. Similar to all other business practices, several regulations and laws need to be kept in mind when formulating and implementing a text message plan.

Text message marketing can indeed help a company reach a maximum number of consumers, facilitate the conversion of customers, and lead to increased brand popularity, but it should be implemented judiciously to reap all these benefits.

What can go wrong?

Text message marketing is only effective if the customers give consent to receive the promotions. Sending unsolicited messages can do more harm than good. The target audience can develop negative feelings about the company if they think the messages to be spam. Intrusive promotions can be detrimental to the growth of a business and that should be avoided while formulating an SMS Marketing plan.

To protect the consumers from information theft and unwarranted spamming, government institutions have stepped in to implement ethical SMS marketing practices.

Text Message Marketing Laws

To successfully grow your business, you must comply with the laws implemented by the government bodies. These regulations are not only essential for maintaining the privacy of consumers, but also to uphold the goodwill of a business. Listed below are some important text message marketing laws of which every business owner should be aware.

Telephone Consumer Protection Act (TCPA)

TCPA is the primary text message marketing law that prevents companies from sending marketing messages to consumers without their consent. Written consent must be obtained by a business before it can send promotional messages to a consumer. The consumer can consent through keyword texting, paper form, or digital signature. The business should disclose the complete details of the kinds and number of texts they will be receiving. If this law is violated, a consumer can file a lawsuit against the business and receive a sum of $500 to $1,500 as compensation.


The CAN-SPAM Act works on the spamming aspect of text message marketing. The FCC and FCT regulate promotional texts to consumers to protect them from unwanted messages. By this law businesses are prevented from spamming consumers with unwanted texts. The law mandates that commercial messages should be identifiable as advertisements. Also, the Customers should have the option of opting out or unsubscribing from these services.

Violation of the CAN-SPAM Act can cost companies up to $16,000 per violation.

General Data Protection Regulation (GDPR)

GDPR is the primary electronic communication law for the European Union. This law applies to any company carrying out business in the EU countries and to companies that handle the data of EU citizens. The law has several mandates which are not confined to the area of text message marketing but apply to data protection in general. Violation of this law can cost a business about 2% to 4% of its worldwide annual revenue.

Privacy and Electronic Communications Regulations and Data Protection Act

Working in conjunction with the GDPR, the PECR and Data Protection Act is used by the UK try to protect the privacy and personal information of the consumers. The PECR applies to website tracking tools and any electronic marketing methods which can risk the privacy of the consumer.
How companies use their user data is governed by the Data Protection Act.
Violation of the PECR can cost a business a maximum of $630,000, while non-compliance to the Data Protection Act can cost up to 4% of the company's global annual turnover.

The Importance of Following the Text Message Marketing Laws

With the global scenario of marketing and sales changing rapidly, businesses need to adopt the latest ways to reach out to consumers. In recent years, text messaging has become increasingly relevant in marketing given its immense contribution to increased sales. While the high ROI of text message marketing makes it a lucrative choice for businesses, many things should be kept in mind to make the strategy profitable. Adhering to the rules and regulations set up by the various laws about text message marketing will not only serve to boost your business but will also contribute to a safe and sustainable marketing environment helpful for you as well as the consumer.

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