MKT-311 Module Six: Class Blog
In 2017, AT&T paid out over $88 Million in refunds to customers due to illegal marketing practices. This demonstrates that breaking mobile marketing laws can have serious repercussions for the businesses involved. I remember getting charged unexpectedly when AT&T placed unauthorized third-party charges on my phone bill years ago. When a third-party charge is added to your AT&T bill without your consent, it’s called “mobile cramming”. AT&T, Tatto and Acquinity were the three companies involved in a scam that gave AT&T over 35 percent of the charges it imposed on its customers, usually in amounts of $9.99 per month. (FTC)
The negative consequences to the consumer when third party charges show up on a bill, is that the costumer has unexpected charges and this can over draw a bank account when on a tight budget. The possible penalties levied on a company for violating the law by The Federal Trade Commission are lofty fines. AT&T has changed its mobile billing practices and had to pay out over $88 million in refunds to more than 2.7 million AT&T customers. The average refund amount was $31 a customer. Since the settlement, AT&T changed its process for third-party billing. (FTC)
For a mobile marketing campaign to remain ethical asking for permission is key. Check in with The Federal Trade Commission (FTC) news and resources. Another company who experienced unethical and illegal mobile marketing activities was Papa John’s (PZZA) franchises and many of their customers. Papa John’s sent customers a total of 500,000 unwanted messages in early 2010. The Telephone Consumer Protection Act of 1991 bars companies from sending advertisements via text message without a consumer first opting into the service. Papa John’s head of legal affairs, said that Papa John’s corporate text messaging program is not subject to the lawsuit, as the text were sent “by third-party vendors and a small number of franchisees.” (PZZA)
FTC Providing Over $88 Million in Refunds to AT&T Customers Who Were Subjected to Mobile Cramming. (2017, September 26). Retrieved from https://www.ftc.gov/news-events/press-releases/2016/12/ftc-providing-over-88-million-refunds-att-customers-who-were
Three Legal Issues to Keep in Mind with Mobile Marketing. (n.d.). Retrieved from https://www.webmarketingpros.com/three-legal-issues-to-keep-in-mind-with-mobile-marketing/
The plaintiffs allege that Papa John’s (PZZA) franchises sent customers a total of 500,000 unwanted messages in early 2010. The spam texts offered deals for pizza. (n.d.). Papa John’s faces $250 million spam lawsuit. Retrieved from https://money.cnn.com/2012/11/13/technology/mobile/papa-johns/
MKT-311 Class Blog
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