Life Time Fitness Settles TCPA Lawsuit for up to $15 million
Life Time Fitness claims that because their members gave their company their cell phone numbers, they consented to be contacted via text messaging. I can’t tell you how many times I’ve heard this exact same thing, where a business thinks that they’re TCPA compliant, just because someone (even a customer) gave the business their mobile phone number.
I don’t know how we can make it more clear to businesses, that in order to be TCPA compliant, you must get customers to first consent to receiving text messages, before sending them text messages. Consent is not given just because they’re your customer, member, subscriber, friend, partner, Facebook fan, within a certain distance from your business, etc. There’s only one way to get consent from someone to be able to send them marketing text messages, and that’s by getting their “prior express written consent”. You can learn more about what this means here, but in the simplest form, when someone gives your business their phone number, they must be made aware that by giving your business that mobile phone number, they’re consenting to receive text messages sent by your business.
We get the question about whether or not a business can text message an existing customer databases so much that I created a decision tree, which helps businesses determine if under the TCPA they can text message previously collected mobile phone numbers. You can download this decision tree for free here. While I don’t want to ruin the surprise, 99.99% of businesses that I speak to about being able to legally text message existing customer databases, have not received consent from their customers, therefore they can’t text message those phone mobile numbers.
This is why working with a reputable SMS marketing provider like Tatango, helps businesses avoid costly TCPA litigation. How would Life Time Fitness have avoided a costly TCPA lawsuit by working with a reputable SMS marketing provider like Tatango? It’s pretty simple, I would have told them that they couldn’t text message those mobile phone numbers that they had previously collected. Period. End of story. If they didn’t want to listen to me, I would have told them to take their business somewhere else, as our job at Tatango is to make clients successful in their SMS marketing efforts, and putting a client at risk of costly TCPA litigation doesn’t help anyone.
What’s crazy is these sorts of lawsuits, where the business never received consent from their customers to text message them, keep happening. For example, check out how HeartLand Automotive used SMS marketing provider TextMarks, to spam 2.1 million mobile phone numbers, resulting in a settlement of $47 million. Need another example? See how Papa John’s used OnTime4U to spam customers that never gave their consent with text messages, resulting in a $250 million TCPA lawsuit. Why do these SMS marketing providers keep letting their clients use their SMS marketing platforms to send text messages to mobile phone numbers that never gave their consent?
There’s two reasons. The first reason is that based on a recent court judgement, SMS marketing providers are now classified as “common carriers”, which means that we’re exempt from TCPA liability when clients use our software to violate the TCPA. The second is that when an SMS marketing provider allows their clients to send text messages to mobile phone numbers that have not given their consent, they make significantly more money than an SMS provider like Tatango that would tell them no. You can read an interesting article here I wrote for Mobile Marketing Watch about the financial incentives that SMS providers have to allow their clients to do whatever they want on their platforms. You combine both of these things, and you can realize why businesses are constantly being mislead by SMS marketing providers as to whether or not they need consent from mobile phone numbers to text message them.
Below is one of the text messages that Life Time Fitness sent in violation of the TCPA.
So what happens when a business violates the TCPA, and sends text messages to phone numbers that never consented to receive text messages?
Life Time Fitness Inc. agreed to pay up to $15 million to end consolidated Telephone Consumer Protection Act lawsuits accusing the company of sending unsolicited marketing text messages en masse to its customers. The plaintiffs’ motion for preliminary approval of the deal said that the nearly 600,000 putative class members will have their choice of either a $100 cash award, a free three-month membership at Life Time Fitness Gold Club or a $250 credit. That’s not all, class representatives (the consumers who brought the lawsuit) will receive $5,000 each, and Life Time Fitness will be forced to pay the attorneys’ fees of the attorney’s that are bringing the TCPA class action lawsuit against Life Time Fitness on behalf of their clients, which is an undisclosed amount.
According to Eric Buss, the executive vice president and CFO of Life Time Fitness, the company recognized $4.7 million in expenses related to this class-action TCPA litigation.
All this because Life Time Fitness didn’t download our free decision chart here. If they would have, they would have realized that text messaging customers that didn’t give their prior consent was a violation of the TCPA, and would have saved themselves up to $15 million. That sucks.