This month’s Mobile Marketing Forum illustrated the rush to get involved in the nascent medium, by existing marketers and start-ups alike. As a speaker, I cautioned marketers to be wary of legal issues. The Federal Trade Commission monitors marketing practices, including mobile. Of primary importance is ensuring campaigns are not unfair, deceptive or misleading.
The word “free” is a bull’s eye. Both the FTC and the states require that when making “free” offers, all of the terms, conditions and obligations are set forth “clearly and conspicuously” at the outset of the offer. That means if there is an additional obligation tied to getting the “free” item it must be disclosed near the word “free.”
Learn from the 900 number. After significant abuses and consumers racking up huge telephone bills through the use of 1-900 telephone numbers, legislators took action. If significant abuses occur in connection with premium text-messaging campaigns these types of services will be next. The remedy? Be sure that it is easy for consumers to understand what they are agreeing to when they sign up for your services.
Text sweepstakes may be illegal. At least three class-action lawsuits were filed against NBC and others involving sweepstakes for “The Apprentice,” “Deal or No Deal” and “1 vs. 100.” Although there may be an alternative free method of entry, if some participants pay to play and don’t receive something of value, a sweepstakes has all three elements of prize, chance and consideration, and is thus an illegal lottery.
These laws have been and will continue to be enforced. Civil penalties in the high six figures to multiple millions of dollars are not out of the question. Keep these numbers in mind if your mobile marketing campaign is pushing the legal envelope.
