Business Text Messaging Compliance Guide: Create a Comprehensive SMS Compliance Checklist

Today’s consumers want to be contacted—and contact you—on their own terms. That means more and more businesses are turning to text messaging to deliver the kinds of personalized experiences that drive growth.

Of course, when choosing another channel to contact customers, a new set of compliance concerns comes into play.

Make sure your business is up-to-date on texting rules and regulations, and take action with the help of this guide and our comprehensive SMS compliance checklist.

Understanding SMS Compliance

Before we delve into the specifics, let’s first understand what SMS compliance means—and what’s at stake for businesses implementing proper text messaging practices. 

Simply put, SMS compliance refers to the set of rules and regulations that businesses must follow when using text messages for marketing, customer communications, or any other business-related purpose. These rules are intended to protect consumers and ensure that businesses engage in fair and ethical communication practices.

The Importance of SMS TCPA Compliance

These regulations do more than protect consumers. Supporting text messaging compliance also protects the health of your business.

Text messaging allows organizations to hold one-on-one personalized communications with customers. And conversational AI SMS capabilities enable incredible scaling as you connect with many consumers at once. The result is that the penalties for non-compliance can add up quickly and in a big way.

The Telephone Consumer Protection Act (TCPA), which effectively treats texts as calls, for example, allows consumers to take legal action against businesses that violate its provisions, with penalties ranging from $500 to $1,500 per message.

But fostering compliant texting procedures is about more than avoiding financial consequences. Texting the right way also protects your reputation, maintains a positive image, and builds trust with your customers. 

By adhering to SMS regulations, particularly with regards to supporting TCPA compliance, you demonstrate your commitment to respecting consumer privacy and engaging in ethical business practices. This can help build long-term customer loyalty and differentiate your business from competitors who may disregard compliance requirements.

Key Terms in SMS and TCPA Compliance

As with any field, SMS compliance comes with its own set of key terms and concepts that businesses should familiarize themselves with. Understanding these terms will help you navigate the compliance landscape more effectively and ensure that you are on top of your compliance obligations.

Some key terms in SMS compliance:

• Express Written Consent: This refers to obtaining the explicit permission of a recipient before sending them text messages. Express consent can be obtained through various methods, such as via an online form or a keyword opt-in. Under the TCPA, prior express written consent is required to send marketing or promotional text messages.
• Implied Consent: In some cases, businesses may be able to rely on implied consent, which is not as explicit as express consent but can still be valid under certain circumstances. Implied consent may apply, for example, if a customer has an existing business relationship with your company.
• Opt-Out Mechanism: An opt-out mechanism allows recipients to easily unsubscribe from receiving text messages. This can be in the form of a reply with a specific keyword, such as “STOP” or “UNSUBSCRIBE,” or by providing a phone number or link that recipients can contact to opt out.
• Do-Not-Call List: Similar to the National Do-Not-Call (DNC) Registry for telemarketing calls, the Do-Not-Call list applies to text messages as well. It is essential to maintain a list of individuals who have opted out of receiving text messages from your business and ensure that you do not send them further messages.
• Terms and Conditions: This document provides a comprehensive overview of your SMS program. It clearly states the nature of messages subscribers will get, how frequently they’ll receive them, and any potential costs or data rates. Additionally, it highlights your privacy practices, directions for opting out, and other essential usage terms.

Transactional vs. Promotional Text Messages

Beyond these basic terms, there’s a crucial distinction to be aware of between two types of business text messages, transactional and promotional texts, and the types of consent they may require.

Transactional text messages are sent to provide recipients with necessary information related to a recent interaction or transaction with a company. These can include order confirmations, shipping notifications, appointment reminders, and account alerts. They are often expected and initiated by the recipient’s action or request. 

In contrast, promotional (or marketing) text messages are sent with the primary intent of promoting a product, service, or event. These messages might advertise sales, special offers, or upcoming events. While transactional messages are usually exempt from certain regulatory requirements due to their informational nature, promotional messages are subject to strict compliance regulations, including the TCPA’s prior express written consent requirements, to ensure the recipient has agreed to receive such communications.

In determining whether texts are marketing communications, authorities will examine links contained in texts. They will ask questions such as “Are you trying to drive traffic with these texts?” or “Are you trying to engage people and, for example, get them to download your new app?” Likewise, even encouraging customers to leave a review or take a survey would be construed as marketing.

Because of the broad view that courts and regulators typically take of what constitutes “marketing,” it’s often advisable to do the same. Speaking during an ActiveProspect webinar, expert attorney Alexandra Krasovec stated that the most conservative, risk-averse approach brands can take is simply to assume that all of your texts could be considered marketing texts—and to source and store evidence of the proper consumer consent accordingly.

The Legal Landscape of SMS Marketing

So, we’ve already suggested that there are a wide range of rules and requirements governing text messaging compliance. But who’s enforcing these rules? And what laws should you be aware of along the way?

Organizations Overseeing Text Messaging Marketing & Compliance

• Federal Communications Commission (FCC): The federal agency responsible for regulating interstate and international communications, the FCC oversees and enforces text compliance as required by laws like the TCPA (which we describe below).
• Federal Trade Commission (FTC): The FTC works to protect consumers from deceptive or unfair practices in the marketplace, and this includes monitoring text message advertising to ensure truthful representation and prevent spam.
• Cellular Telecommunications Industry Association (CTIA): While not a government entity, the CTIA is an industry trade group composed of mobile telco carriers that has proposed a set of messaging best practices and guidelines for marketers to follow.

Federal Laws Governing SMS Marketing

While they’re not the only laws governing text messaging, when it comes to supporting SMS compliance, there are two federal laws that every organization should be aware of.

• Telephone Consumer Protection Act (TCPA): This law, enforced by the FCC, sets guidelines for obtaining consent and sending automated text messages. It requires businesses to obtain prior express written consent from recipients before sending marketing messages. A key regulation in contact center compliance, the TCPA also prohibits the use of automatic telephone dialing systems (ATDS) or artificial or prerecorded voices to send text messages without consent, imposes restrictions on when telemarketing calls can be made, and more.
• CAN-SPAM Act: Although primarily focused on email marketing, the CAN-SPAM Act also applies to SMS marketing, regulating promotional messages. Primarily enforced by the FTC, the CAN-SPAM Act requires businesses to include accurate sender information, provide a clear and conspicuous opt-out mechanism, and honor opt-out requests promptly.

The Rise of State Telemarketing Laws

Complicating compliance matters significantly, there’s also been a proliferation of state-level laws restricting outbound calls and text messages. These so-called “mini-TCPA” laws passed in states like Florida, Oklahoma, Washington, and others have created a complex, fast-changing patchwork of regulations that marketers and outbound sales teams with interstate business need to keep their eyes on at all times, as well.

Your SMS Compliance Checklist

Now that we’ve covered the basics of SMS compliance lingo and its legal landscape, it’s time to translate things into practical terms that you can put to use. Use this comprehensive SMS compliance checklist to help protect your organization while contacting customers over text.

1. Register Your Campaigns with The Campaign Registry

Before you launch an SMS marketing effort, it’s vital to register your campaigns with The Campaign Registry. This ensures transparency and builds trust with messaging platforms and carriers. By detailing your campaign, carriers can more easily understand your messaging source and intent, leading to smoother delivery and fewer issues with regulatory compliance.

2. Obtain Proper Consent

Gaining explicit permission from recipients before sending SMS messages is paramount. Consent can be secured in various ways, such as through a web form, during a checkout process, or via a paper form. It’s crucial to document and maintain records of this consent to protect your business and adhere to compliance rules.

3. Confirm Opt-Ins with Your CTA

When a user decides to opt into your SMS program, always send a confirmation message. This serves two purposes: it verifies the user’s intent and provides them with an immediate understanding of what they’ve signed up for. Including a clear call-to-action (CTA) in this confirmation can enhance engagement right from the start.

4. Clearly State Terms and Conditions

Transparency is key in any marketing endeavor; texting customers is no different. Ensure your SMS subscribers are well-informed by providing a clear and concise overview of your program’s terms and conditions within your initial call-to-action text. This should include details like messaging frequency, potential costs, how personal data will be used, and opt-out methods.

5. Share Text Messaging Frequency Up Front

It’s important to manage subscriber expectations regarding how often they’ll hear from you. By communicating the expected frequency of messages—whether daily, weekly, or monthly—subscribers are less likely to feel overwhelmed or spammed.

6. Follow Federal and State Call Time Restrictions

Both federal and state regulations outline specific times when businesses can send text messages. At the federal level, this is between 8am and 9pm in the recipient’s local time zone but there are many different individual state calling restrictions. Familiarizing yourself with these regulations ensures you’re not inadvertently bothering subscribers during inappropriate hours.

7. Allow Easy Opt-Outs and Honor Them

Subscribers should always have an uncomplicated method to opt out or unsubscribe from your SMS list. Often, this is facilitated by instructing them to reply with keywords like “STOP” or “UNSUBSCRIBE.” Make the process straightforward to build trust and maintain a positive relationship with your audience.

In turn, respecting a user’s decision to opt-out is non-negotiable. Once someone chooses to unsubscribe, remove them from your list promptly and ensure they don’t receive any further messages. This not only keeps you compliant but also respects the user’s preferences.

8. Scrub Your Lists

Regularly updating your contact lists is vital for SMS compliance. Ensure you’re not messaging numbers on the DNC list, as this can result in penalties. Additionally, watch out for serial litigators, individuals who target non-compliance for lawsuits. By diligently scrubbing your lists, you reduce the risk of costly litigation and maintain a trusted brand reputation.

9. Use the Right Language and Stay on Topic

SMS compliance isn’t just about sending your messages the right way and to the right people. It’s also about sending messages with the right content. The rules governing text messaging compliance, including those from the CTIA, restrict the topics that you can discuss over texts with consumers. Restricted content is referred to by the acronym SHAFT, short for sex, hate, alcohol, firearms, and tobacco.

10. Work with the Right Partners

Compliance is no simple matter, and it’s important enough—to your performance and your reputation—that you should rely on experts for help. Enlist the support of expert counsel to assess your practices and policies for compliance risks. Also, evaluate your contracts with lead vendors and other partners to ensure that that they dictate responsibility for the maintenance of consent. Contracts should clearly address who is responsible for collecting consent, maintaining records and how they’re shared, as well as how parties will respond to any claims.

Meanwhile, work with a technology provider like Convoso with a proven track record of putting compliance first. At Convoso, we stay on top of the latest developments in technology and compliance, so that you can support SMS compliance and drive growth.

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DISCLAIMER: The information on this page and related links is provided for general education purposes only and is not legal advice. Convoso does not guarantee the accuracy or appropriateness of this information to your situation. You are solely responsible for using Convoso’s services in a legally compliant way and should consult your legal counsel for compliance advice. Any quotes are solely the views of the quoted person and do not necessarily reflect the views or opinions of Convoso.