We just got word that a $2.5 million text message spam settlement has been reached between consumers and Lithia Motors, the nation’s ninth-largest car dealer. The settlement is awaiting final approval by U.S. District Court Judge Richard Jones. The lawsuit claims consumers received unsolicited text messages from Lithia Motors, which violated federal and state laws barring the use of automated devices to send text messages to individuals without their consent. The unsolicited text messages came from the short code 35703.
Lets dive into the numbers regarding how many consumers were impacted, the amount of text messages sent, and who received them.
- 57,800 – The amount of consumers that Lithia Motors sent unsolicited text messages to about 0% financing on used-cars.
- 48,000 – The amount of consumers that received another unsolicited text message from Lithia Motors the next week.
- 6,190 – The amount of consumers that opted-out of the first unsolicited text message, but still received the second unsolicited text message the next week. Lithia blames this on “a technical error.” Whoops…
- 14 – How many different states these unsolicited text messages were received in.
Now lets look at the dollar figures represented in this text message spam lawsuit, who got what and exactly how much.
- $2.5 million – The settlement amount.
- $600,000 – Fees collected by the attorneys representing the consumers.
- $150,000 – Fee for administration of the claims.
- $10,000 – The amount the lead plaintiff received.
- $1.74 million – The amount to be paid out to class members.
- $175 – The amount to be paid out to individual class members that received the first text message.
- $150 – The amount to be paid out to individual class members that received the second unsolicited text message.
- $500 – The amount paid out to individual class members that received the second unsolicited text message, after they opted out after the first one.
- $675 – The amount paid out to individual class members that received both the first unsolicited text message and the second unsolicited text message, after they had previously opted out.
So what can we learn from this SMS spam lawsuit?
- Don’t ever send text messages to consumers that haven’t given you permission to do so.
- When looking for an SMS marketing software, don’t trust just any provider. Lithia Motors hired a company called DME Automotive to run their SMS campaign, a company that does almost everything under the sun, including direct mail, e-mail, inbound & outbound calls, voice broadcast & IVR, web and text messaging. My opinion is that most software companies can only be good at one thing, maybe two if they’re really good. With this SMS marketing lawsuit, DME Automotive proved that text messaging is definitely not one of those things.