Dealerships & Text Messaging

Text messages are now the preferred method of communication for many people. Quick, convenient, and comfortable, text messages have replaced phone calls, emails, and in-person conversations for many people in many situations. It’s natural that businesses—especially automotive dealerships—would want to take advantage of this popular and efficient method of customer communication. While text messaging is a powerful and convenient way to interact with dealership customers, failure to follow applicable consumer protection laws can result in significant per-violation fines and upset customers.

Electronic Communications are Regulated by Governments

Tempted by the opportunity to connect with customers via text messaging, many companies have abused the medium by engaging in overly frequent and unsolicited communication. For this reason, governments have started to regulate the ways in which companies can contact customers via text messaging and mobile phones. Those regulations have taken slightly different forms in the United States and Canada, but the same basic principles apply in both countries. In the United States, these rules have been incorporated as modern additions to the Telephone Consumer Protection Act, also known as the TCPA. In Canada, commercial communications are regulated by Canada’s Anti-Spam Law, or CASL.

Infractions Can Result in Significant Penalties

The TCPA and CASL laws are intended to protect consumers from unsolicited marketing communications, including text messages and telemarketing calls. Companies can incur significant financial penalties if found to be non-compliant. TCPA violations in the U.S. can result in fines of up to $1500 per violation. CASL violations can result in civil and criminal charges as well as corporate and personal financial liability.

Understanding the Laws Brings Benefits

Of course, these consumer protection regulations do not prohibit all customer communications, and there is still plenty of room for legitimate, productive communication between dealerships and their customers. But before engaging in electronic communications with customers, dealerships should understand exactly how the laws work to avoid potential problems. Generally speaking, these laws do not regulate calls and text messages that are transactional in nature, meaning those that are not marketing solicitations.

As a starting point, dealerships should keep the following general guidelines in mind:

  1. Do not use text messaging to send marketing-related communications without proper consent.
  2. Where possible, obtain prior express written consent to contact customers via text message.

Text messaging should fit within a comprehensive electronic marketing policy developed in consultation with your attorney or compliance team. Customer touchpoints and lead information is sourced through various means and the management of consent information is critical to avoiding liability. Check with your attorney for more information on how to obtain/manage consent and when to send messages.

Finding the Right Technology Providers is Key

Reputable software providers, including Xtime, have built their tools with these compliance guidelines in mind. Xtime built its solutions to aid dealers in complying with applicable consumer protection laws in both the United States and Canada in a few ways: Xtime defaults the marketing settings for phone, email, and text messages for all new customers to Opt Out; automated appointment reminders, completions and marketing features will not contact new customers unless customer gave explicit consent; when a privacy setting for any customer (new or existing) is changed, the Xtime Service sends an email to the affected customer to document the change, and logs an “audit record” of the change in its database; and all customer-facing email notifications generated by the Xtime Service contain an “Unsubscribe” link. Xtime also requires that our dealership clients use the Xtime Texting solution to send transactional/non-marketing messages only.

Xtime Texting is intended to permit a dealership to communicate with a consumer about an ongoing service appointment, and is not intended to market other goods or services to consumers. The FCC has issued guidance indicating that providing a cell number in connection with a transaction generally constitutes prior express consent to be contacted at that number with information related to the transaction for non-marketing purposes. See 7 F.C.C.R. 8752 ¶ 31 (1992). Use of Xtime’s Texting feature to communicate with consumers about their ongoing service appointment is a transactional text for a “non-marketing” purpose.

Xtime also discourages dealership employees from using their personal mobile devices for communications with customers because opt-ins and opt-outs cannot be tracked.

Given the potential upside of text message communications with customers, dealerships should begin implementing tools and processes that allow them to deploy text messages to customers. However, dealerships must use caution to avoid breaking rules and incurring heavy fines. Prudent dealers are wisely taking the time to educate themselves and to understand that they are ultimately responsible for their compliance with all federal and state laws. Armed with that knowledge, they can buy confidently knowing that Xtime gives dealers the ability to safely and securely communicate with their customers about their ongoing service appointments.

Notice: The information provided here about the law is not legal advice, nor is it a substitute for reading or interpreting any applicable law, including TCPA. We strongly advise you to obtain legal advice from your attorney regarding compliance with TCPA.