Mobile Marketing: Activities, Ethics & Legal Considerations Explored
Mobile devices have changed the way the world interacts, facilitates business, and communicate. With ever-changing mobile technologies, come new opportunities and liabilities for companies in their marketing efforts. Done right, following strict standards and transparency, it opens up a slew of new possibilities for businesses to better serve their customers. Done wrong… well… One suck case where a company violated consumers’ rights is that of AT&T and their use of Mobile cramming. There’s also the $250 million class-action lawsuits for Papa John’s sending over 500,000 unwanted text messages in early 2010. As you’ll see below, things didn’t quite turn out too well for either of these companies for violating consumers’ rights.
AT&T & Mobile Cramming – FTC Ruling
The Federal Trade Commission (FTC) forced AT&T to refund over 2.7 million of its customers for third-party charges that were added to their bills without their consent. This tactic is known as ‘mobile cramming’. The FTC ruled that AT&T was in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with charging consumers for third-party monthly subscriptions that the consumers never authorized. AT&T then had to refund customers over 88 million dollars.
This case showed what can happen when companies choose to ignore laws that are in place to protect consumers.
Papa Johns & Unwanted Text Messages Class Action Law-Suite
Papa John’s violated the Telephone Consumer Protection Act of 1991 which bars companies from sending advertisements via text message without a customer-first opting in to receive messages.
The franchises ended up sending text blasts using a service called “OnTime4U”, sending over 500,000 messages to consumers in 2010. Papa John’s was first sued in April of 2010 and stopped using OnTime$U’s services after the company informed it’s corporate and franchisees that sending unsolicited messages to cellphones “is most likely illegal”.
Mobile Marketing Ethics
Marketing professionals have three ethical norms to follow: Do no harm, build trust with marketing systems, and embrace ethical values that consist of honesty, responsibility, fairness, respect, transparency, and citizenship.
Marketers need to ensure not to mislead consumers. Also, they must take steps to protect consumer data, in specific industries, not target children, and ensure proper consent is acquired before sending electronic messages through email, social media, or SMS. Certain states and countries have different laws, but an excellent resource you can reference to learn more about marketing ethics, laws and guidelines can be found at the Direct Marketing Association.