CITGO agreed to the $8.3 million settlement of a TCPA class action lawsuit involving unsolicited text messages sent to contacts acquired from entries in a prior sweepstakes they had sponsored. Matthew Gottlieb alleged that he received texts from CITGO on three separate occasions in 2016 without his consent. His information was originally obtained by CITGO after he entered two contests sponsored by them in July 2015.
Mr. Gottlieb alleged that participants in CITGO’s “text-to-win sweepstakes”, promoted at various “concerts, theme parks, sporting events, and retail gas stations”, began receiving automated telemarketing texts which were unsolicited and in violation of the TCPA. The settlement motion stated that participants in the contests “never actually consented to receive” marketing texts from CITGO.
The personal information provided by Mr. Gottlieb’s for purpose of entering the sweepstakes was later used for a text marketing campaign of the Club CITGO mobile application. According to Mr. Gottlieb, the campaign was an attempt to entice him make purchases from CITGO gas stations. He claims that CITGO sent similar illegal text messages to more than 90,000 other consumers without their consent.
Mr. Gottlieb filed the action on November 23, 2016 in the Southern District of Florida alleging violation of the Telephone Consumer Protection Act (TCPA). He stated that for eight years, he has been registered on the National Do Not Call Registry. He further claimed that he never offered his phone number to CITGO and never consented to calls from the company.
In his lawsuit, Mr. Gottlieb claimed that CITGO:
- Violated the TCPA’s express consent provisions and used automatic calling technology to sell its products and make offers.
- Invaded his personal privacy and disrupted his daily life with unsolicited calls.
- Caused a drain on his cellphone battery which limited use of his cellphone (This point was offered in an effort to prove harm for the purpose of having standing.)
The settlement was agreed to on August 8th in the amount of $8.3 million. Of which, $300,000 will go toward court administrative costs and fees. The plaintiff’s attorneys expect to receive one third of the settlement amount. The remainder will be divided between the 93,000 individuals in the class action. It is estimated that each text message recipient will receive $56 per text. If approved by the court, the agreement also releases all claims against CITGO and the third party marketing companies hired to send the texts on their behalf.
This settlement highlights the class litigation risks to companies that collect consumer cellphone numbers for one purpose and use them for another. Under the Telephone Consumer Protection Act, companies must obtain express consent from consumers before sending texts or placing calls using an automated dialing system to mobile devices. Consumers can sue for up to $1,500 per call or text for willful violations of the TCPA. Marketers who use telemarketing calls or texts to provide informational or promotional messages should ensure they understand and comply with all applicable regulatory requirements.
Businesses that choose to market using pre-recorded voice messages can limit the number of complaints they receive by only calling with the proper consent, scrubbing Do Not Call lists, and honoring opt-outs. Implementing these best practices will help your business stay off the radar of regulators.
A problem common to businesses that use telemarketing and ATDS is the confusion of choosing the correct TCPA “consent” requirement for calling on your leads. Contact Center Compliance has developed the simple solution for your business. Download our free Quick Reference Guide for easy identification of the correct “consent” requirements under the TCPA based on the specific Call and Line Type of your lead data.
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