If you have yet to hear about the $250M class-action lawsuit against Papa John’s Pizza for sending text message spam to their customers, you must be living under a rock. When comparing the amount of press this lawsuit has received to the most recent $47M text message spam settlement with Jiffy Lube and TextMarks, that case barely registers as a blip on the radar. Just do a quick Google search for “Papa John’s Spam” and you’ll get 1.1M results!
The problem with so much press regarding a lawsuit like this is that there tends to be a lot of misinformation out there regarding what happened and how this impacts text message marketing. To clear things up, below are the facts of the case:
- OnTime4U, a marketing company, offered to increase the profits of Papa John‘s restaurants by sending text message advertisements to their customers. Who wouldn’t want to increase the profits of their business?
- OnTime4U apparently told Papa John‘s franchisees that it was legal to send text messages without customer consent because there was an existing business relationship between the customers and the Papa John‘s restaurants. I guess no one at Papa John’s read our most recent blog about the impact of the TCPA on text message marketing. Whoops!
- Papa John‘s franchisees provided OnTime4U with lists of telephone numbers of individuals who had purchased pizza from them in the past.
- OnTime4U removed landline numbers from the lists and sent text messages to the numbers associated with cell phones.
- The text messages OnTime4U sent on behalf of the Papa John‘s franchisees solicited consumers to purchase Papa John‘s products.
- A former OnTime4U partner testified that, to her knowledge, none of the Papa John‘s franchisees had received prior consent from its customers to send them text message advertisements.
- Kevin Sonneborn, one of the Franchise owners, testified that customers of his franchise were not asked for their permission to send text messages before their phone numbers were given to OnTime4U.
- Neither Papa John’s nor OnTime4U was able to provide any evidence that any customer who received messages gave their consent.
- The Plaintiff alleges that Papa John‘s directed, encouraged, and authorized its franchisees to use OnTime4U‘s services. Preliminary discovery in the lawsuit supports their allegations.
- Kevin Sonneborn, one of the Franchise owners, testified that when he told his “Franchise Business Director” that he had run a test campaign with OnTime4U and it was not successful, the “Franchise Business Director” told him to try it again.
- Papa John‘s has produced emails from two different “Franchise Business Directors” encouraging their franchisees to try OnTime4U‘s text blasting services.
- There is evidence that OnTime4U made a presentation promoting its text blasting services at the fall 2009 Papa John‘s ―Operators Summit in Las Vegas.
Since this news broke, I’ve received dozens of questions, so below are some of my thoughts regarding the case and the impact on text message marketing.
- This is an open and shut case in my opinion, with a clear violation of the Telephone Consumer Protection Act.
- This lawsuit is very similar to the Jiffy Lube lawsuit, in that the SMS provider they hired (TextMarks in the case of the Jiffy Lube lawsuit) are complete idiots, and don’t have even a basic understanding of how the TCPA applies to text message marketing.
- This hurts the text message marketing industry as it will make consumers think twice about opting into an SMS campaign.
- This also hurts the text message marketing industry as it will make business owners think twice about starting an SMS campaign, as most people only have time to read the headlines.
- This helps SMS providers like Tatango, who have made it a focus of their business and operations to have a solid understanding of the Telephone Consumer Protection Act. Brands that see the value in SMS marketing will want to partner with providers like Tatango that have done their homework and are knowledgeable about the rules and regulations.
- This isn’t going to be a $250M settlement, these types of lawsuits are always settled before actually going to trial, and I don’t see any reason why this one wouldn’t either. How much though? That’s hard to say as they didn’t disclose the number of people that received the messages.
- I did a search for “OnTime4U” and couldn’t find any SMS provider that is still in business under this name. Thankfully these types of lawsuits always weed out the bad characters in our industry. I wonder how long it will take for TextMarks to go out of business after their most recent lawsuit…
What are your thoughts about this lawsuit, anything that I’m missing here? Let me know in the comments section below.