Mobile Marketing Carries Trap Doors

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As mobile messaging gains mainstream adoption, marketers are devising ways to target consumers on cell phones.

But marketing to people on their personal devices is a delicate area with many laws in effect to protect consumers. Before using mobile marketing, marketers should be aware of some legal tips. The Mobile Marketing Association is drawing up best practices, which can be found at its site. 

"First and foremost for marketers is to understand the legal issues involved and making the cost of calls clear to consumers," said Joseph Lewczak, advertising attorney for Davis & Gilbert, New York.

The Federal Communications Commission has two main laws that apply to mobile marketers: the CAN-SPAM Act and the Telephone Consumer Protection Act. CAN-SPAM legislates how messages are sent and with what kind of permission.

The Telephone Consumer Protection Act prohibits autodialers: recorded messages where parties have to pay for the call. This includes a component where text messages require consent from the consumer.

Consent is difficult to measure. For example, if a consumer gives a mobile number as a contact, then she has given consent, even if it is just for contacting that individual about an account with a firm.

Another issue is whether the mobile ad clearly discloses the offer's terms and conditions. Many text-messaging campaigns involve promotions and sweepstakes for receiving free products and downloading ring tones.

Some promotions invite consumers to receive news updates like horoscopes or celebrity gossip by text message. Such marketers need to communicate to a consumer within these messages whether there is a charge and what that cost is. This often is not disclosed.

"This is similar to 900 numbers in the 1980s where the ads failed to disclose fees and terms," Mr. Lewczak said.

Charitable donations are another form of mobile marketing that is not always strictly within the law. Depending on the state law, to solicit money for a charity, a firm must be registered as a charity. Many mobile companies get around this by acting as aggregators, collecting money and affiliating with a charity.

Then there is the gray area of sweepstakes that charge a fee to enter.

"Reverse auctions where consumers pay $1.99 to guess the lowest unique bid could be considered an illegal lottery depending on the state," Mr. Lewczak said.

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