Privacy & Information Security Law Blog

On September 11, 2015, the Federal Communications Commission (“FCC”) announced that Lyft Inc. (“Lyft”) and First National Bank Corporation (“FNB”) violated the Telephone Consumer Protection Act (“TCPA”) by forcing their users to consent to receive automated text messages as a condition of using their services. The FCC warned that these violations could result in fines if they continue.

The TCPA is a federal privacy law that requires companies to obtain their users’ prior express written consent before using autodialing systems to send marketing or advertising through phone calls or text messages. Companies may not condition use of their service on such consent.

The FCC found that although Lyft’s terms of service required users to expressly consent to receiving autodialed communications and gave them the option of opting out of automated text messages, such opt-out representations were “illusory” because there was no easy way to fully opt out from receiving the messages. Furthermore, if a user did opt-out of the automated text messages, the user would be barred from receiving security text messages necessary for log-in purposes, and could no longer use Lyft’s services. Thus, the FCC held that Lyft was conditioning use of its service on consent to receive automated text messages, and was therefore in violation of the TCPA.

The FCC found that FNB’s Online Banking Service Agreement explicitly required users to receive automated marketing emails and text messages in order to use FNB’s online banking platform, but unlike Lyft, did not describe any way for users to opt out from receiving such communications. Thus, the FCC held that FNB was conditioning use of its service on consent to receive automated communications, without giving its users the option to opt out, and was therefore in violation of the TCPA.

In a statement announcing the citations, Travis LeBlanc, the Chief of the FCC Enforcement Bureau said, “Consumers have the right to choose whether they want marketing calls and texts to their cell phones. Today, we again make clear that such calls and texts are unlawful without express written consumer consent. We urge any company that unlawfully conditions its service on consent to unwanted marketing calls and texts to act swiftly to change its policies.”