Last month, women’s fashion retailer Bebe Stores, Inc. agreed to settle a proposed class action over purported violations of the Telephone Consumer Protection Act (“TCPA”), which alleged that the retailer sent unwanted spam texts through an automatic telephone dialing system. According to court records, Bebe’s financial condition was a substantial factor in the parties’ considerations to settle the matter, as Bebe recently closed all of its physical stores and terminated the vast majority of its employees in an effort to avoid bankruptcy. If approved, the deal could provide more than $772,000 to shoppers, amounting to a payout of $20 to each class member who provided a mobile telephone number at the point of sale and subsequently received a text from the retailer.
Takeaway: Advertisers should carefully structure text message marketing programs in order to comply with the TCPA. This case serves as a reminder that the class action bar is very active with regard to text message programs.