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Is DMP’s Customer Referral Program Compliant With TCPA? 
Yes, and Here’s Why

December 03, 2019

By Mark Hillenburg, executive director of marketing, DMP

A couple of weeks ago, we released a cool “refer a friend” program that hopefully you’ve had a chance to check out. With this new program, we’ve made it as easy as ever for your customers to refer business to you. But some of you have asked if sending text messages through the Virtual Keypad™ app in an attempt to get referrals violates the Telephone Consumer Protection Act (“TCPA”). That’s a great question!

The short answer is absolutely not. While the program gives you an easy way to leverage the influence and reach of your customers, because they’re the ones choosing to initiate the referral, it’s in total compliance with the federal TCPA statute. Let’s take a closer look...

First, it’s Important to Understand TCPA’s Purpose

The TCPA was enacted in 1991 to combat telemarketing faxes and robo-calls to land lines. As technology developed, the statute’s prohibitions were extended to the use of robo-texting, most commonly used in connection with mass marketing campaigns. Now, with the proliferation of social media apps that allow users to invite their friends and family members to connect with them, plaintiffs’ lawyers have been bringing claims against app providers with increasing frequency on the ground that invitational text messages sent by apps violate the TCPA.

Next, Let’s Take a Look at Our Referral Process

After you’ve enabled referrals in Dealer Admin™, your customers will see a new Refer a Friend tab in their Virtual Keypad app. When they open the tab, they’ll see the incentive you’re offering them if they’re willing to send an invite to their friends. If they are, you may very well have a warm lead who’s waiting for your call. But here’s the most important part: It’s always up to your customers and their friends to decide if they’re interested.

In today’s world of mobile apps and word-of-mouth marketing, the easiest way for a consumer to communicate with their friends is through social media. So why not join other savvy marketers who are using social media to their advantage! Look at ride-sharing giants Lyft and Uber, for instance — perhaps two of the most well-known proponents of referral marketing via their in-app referrals.

But as you know, some apps have been under scrutiny by the Federal Trade Commission (FCC) for their texts sent through their apps. While some apps have been found to be in complete compliance with TCPA, the FCC has determined that others weren’t. Based on recent findings, here’s the FCC’s position:

“An app provider cannot be held liable under the TCPA where the app requires the user to select whom they wish to send an invitation to and only sends text messages to contacts specifically selected by the user, and only after the user has affirmatively pressed another button in order to cause the text message to be sent. Indeed, even if an app automatically selects a user’s contacts to receive an invitation, this action will not violate the TCPA as long as the user can choose not to send these contacts an invitation by de-selecting them.”

Virtual Keypad leaves it up to the customers whether to send any invitational text message, to whom to send them and what to say in them. Accordingly, the process we’ve implemented to enable customers to send text invitations to their contacts via Virtual Keypad is substantially identical to those the FCC and courts have determined are legally acceptable. 

Because so many people hang out on social media already, you can easily connect with more customers and their friends, and most important, do it legally. Use it to your advantage.



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