There's a thin line between creative marketing (which is good) and illegal marketing (which is obviously bad). Just ask national pizza chain Papa John's, which is fending off a $250 million lawsuit brought by a class of plaintiffs.
In the Papa John's spam case, some franchise owners used a third-party text-messaging service called OnTime4U to send out promotions, reports CNN Money. OnTime4U is also being sued.
But customers who received the text messages say they never signed up for them -- they just called to order pizza. After their orders, some got more than a dozen text messages in a row, often in the middle of the night.
Aside from being annoying and possibly costly for recipients without unlimited texting plans, the marketing tactic also violated federal law, the lawsuit claims.
Back in 1991, federal lawmakers had the foresight to pass the Telephone Consumer Protection Act, which required businesses to get consumers' consent before sending out text message spam.
In the class action lawsuit, the Papa John's customers say they did not give their consent before receiving text messages for pizza sales, writes CNN Money.
But Papa John's head of legal affairs raised a potential defense: "Third-party vendors and a small number of franchisees" were the ones who engaged in the alleged spam; Papa John's corporate HQ had nothing to do with it, she told CNN.
As Papa John's lawyers digest the quarter-billion-dollar lawsuit, small business owners can use this as a learning opportunity: Even if you hire another company to handle your text-message marketing, make sure what they're doing is legal. After all, they're sending texts with your name on them.
Papa John's could face potential penalties of up to $1,500 per illegal text message, CNN reports. That's why it's a good idea to run your marketing strategies by a small business attorney to ensure that what you're cooking up complies with the law, and won't end up costing you a ton of extra dough.
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- Papa John's Allegedly Sent 500,000 Illegal Text Messages To Customers (The Huffington Post)
- Does Your Email Marketing Violate Spam Laws? (FindLaw's Free Enterprise)
- Pizza Patron Offers Free Pizza if You Order in Spanish (FindLaw's Free Enterprise)