TCPA Compliance Texting: How to Use Text Messages to Accelerate Customer-Facing Processes

*Update for Financial Service Companies at the end

Compliant Texting Is An Untapped Customer Communication Channel

Texting is no longer the playground for sending silly messages and photos. Smart businesses have understood the value in communicating with customers in a simple, intuitive and compliant fashion over text. Because of its ubiquity, simplicity, and speed, Business-to-Customer texting has the efficiency and efficacy to help businesses complete processes faster. Here are a few statistics that show the potential of integrating compliant, texting services to accelerate your business’s processes.

• 98% of all texts are opened
• 90% of texts are read within the first three minutes of receipt
• Businesses convert 40% more customers when texting in conjunction with an interaction
• 80% financial services firms already use texts for customer communications

Texts Are Replacing Emails as the ‘Go-To’ Communication Channel

Financial institutions must be able to communicate and transact business quickly. With the heavy regulatory environment, businesses need to find ways to speed up their compliant processes. They understand that branch visits, paper-based processes and spammy emails simply don’t work anymore. Given the efficacy of texting, it’s no wonder that businesses that have integrated text-based solutions have seen it has fast become the communication tool of choice for rapid response and efficiency. Financial services institutions must adopt new communication techniques to take advantage of enterprise-scale secure messaging platforms that can deliver complete content control and compliance to meet their needs.

Texts Have Four Times the Response of Email

While email still has a strong presence in business to business communications, texting has taken over as the efficient way to communicate with customers. Unfortunately, because of the explosion of email marketing, email has become inundated and spammy - reducing the chance that email will be understood as legitimate, and actually opened and read. Conversely, SMS messaging still has high legitimacy. Because of strict regulation, this communication channel still has a high open and response rate, especially compared to email, and even more so, amongst mobile phone users. SMS/text messages have a phenomenal open rate of 98%. No other communication channel can offer a similar rate, making SMS communication one of the most effective ways to get your message to your customer. In contrast email communication reports a 22% open rate, this significantly reduces the chance of success.

Simplify Communication - Especially Regulated Businesses

Customers expect that all aspects of financial services be secure and simple. Today’s consumers expect an immediate response when it comes to their financial transactions as well as having the ability to communicate financial data anytime, anywhere in a secure, confidential manner.  And if financial companies intend to communicate via text, they must assume the responsibilities of keeping text communications secure.

Text Messaging Compliance Concerns?

The Telephone Consumer Protection Act (TCPA) governs mass transmissions of phone calls and text messages (SMS) in the United States. The TCPA was signed into law in 1991 as a response to a growing rise in unregulated and harassing telemarketing calls and faxes. It has since been updated to include SMS messaging. Essentially, the TCPA restricts telephone solicitations (i.e. telemarketing) and the use of automated phone equipment. It limits the use of pre-recorded voice messages, automatic dialing, fax and SMS use. Without explicit customer consent, companies must adhere to strict solicitation rules and must honor the National Do Not Call Registry. As a protection, subscribers may sue a company that does not follow the TCPA guidelines. Consumer consent is an essential factor under the TCPA and should be a primary focus of any business that communicates with consumers and customers directly via any telephony method.

The Declaratory Ruling and Order of 2015

The TCPA was once again amended and more clearly defined in July 2015, when the FCC officially released the TCPA Declaratory Ruling and Order which addressed petitions and requests for clarity on how the TCPA is to be interpreted by the FCC. This new order defined a handful of terms found in the TCPA and further clarified restrictions on telemarketers and consumer rights. Some key components on this ruling include:

• Telephone service providers can offer robocall blocking to consumers.
• Telemarketers may not use automated dialing to call wireless phone and leave pre-recorded telemarketing messages without consent.
• Consumers may revoke consent to receive calls or SMS messages in any ‘reasonable’ way, at any time.
• Callers must cease calling any reassigned phone numbers (wired and wireless).
• Consent ‘survives’ when a person ports their landline phone number to a wireless number.
• Some ‘urgent circumstances’ still allow a company to call or send SMS texts to wireless phones without prior consent, such as alerts about potential fraud or reminders of urgent medication refills. However, the company instigating such communications must offer consumers an ‘opt-out’ option.

Is the TCPA Similar to CAN-SPAM?

From a regulatory perspective, text messages though should be treated similarly to email. Email has its own set of consumer protections. But do they extend to business relationships? The CAN-SPAM Act regulates commercial email messages from a business to a customer or potential customer. CAN-SPAM defines commercial messages as advertisements or promotions for a product or service. As an important note—this definition does not extend to messages that communicate about an existing or ongoing transaction or relationship. This would include delivery notifications and communication about any active process with a customer.

Texts as Part of the Business Process

When it comes to doing business in the digital world, it stands to reason that transactional texts should be set apart from marketing messaging because it is part of concluding a business process, in which the consumer has already engaged. The details of a transaction have already been identified and the consumer has agreed to continue the digital dialogue.

Consent and Transactional Communication

Prior consent may include agreements obtained for text message opt-in via email, website form, text message, dial pad or voice recording. Transactional texts contain no marketing messaging and therefore should be exempt from any compliance details that govern promotional texts. The TCPA doesn't, nor should it, apply to transactional texts just like email spam laws don't apply to transactional emails. Doing business in the digital age should protect both parties in a business equation. Both parties should know what type of agreement they’re entering into at the beginning. Businesses, then, can incorporate checks and balances into their strategic plan and mitigate risk when it comes to TCPA, or any relevant regulatory compliance for text messaging.

Applying Compliant Texting to Improve Business Results

Compliant texting helps organizations communicate more effectively. New services enable completion of complicated processes instantly and effortlessly through simple text messaging. Text initiated sessions can now empower business and their customers to complete complicated tasks like form filling, eSignatures, document collection, secure payment and more.

New Update For Financial Service Companies and Debt Collectors

The CFPB recently proposed new rules, dealing with new communication methods such as text. They recognize that certain laws have been around since the 70's and do not account for new technology, especially technology the consumer prefers. The proposal points to trends which indicate that channels such as text messaging are sufficiently more efficient to establish contact and, most importantly, less intrusive than a standard phone call.