Is Building Your Own SMS Solution a Good Idea?
When it comes to creating an SMS strategy for customer outreach, businesses often face a critical decision: to build an in-house messaging infrastructure or partner with a professional SMS service provider.
Managing an SMS platform internally might seem economically attractive at first glance, but once you really start to dig in, you’ll find it carries with it a host of hidden costs and risks, particularly in terms of compliance.
Such undertakings demand significant investment in both technological infrastructure and specialized personnel to navigate the complex regulatory terrain, a costly endeavor that may eclipse the initial budget projections and divert resources from core business operations.
In this blog post, we’ll scratch the surface of the complexities of creating your own SMS solution by covering the levels of compliance for text messaging, which include:
- How to stay in compliance from a provider’s perspective
- Ensuring you’re in compliance with carriers
- Compliance from a legal perspective
- A look at compliance from a consumer perspective
Understanding the Legal Landscape of SMS Communications
It’s crucial for businesses to be aware of and comply with compliance guidelines to build trust with consumers, avoid legal consequences, and maintain a positive reputation.
Implementing clear opt-in processes, providing easy opt-out options, and staying informed about applicable regulations are key steps in ensuring compliance with SMS marketing laws.
These regulations not only safeguard consumer privacy but also serve as the cornerstone for trustworthy and ethical communication between brands and consumers.
Levels of Compliance for Text Messaging
SMS communications have become an indispensable tool for businesses to connect with their customers. However, the convenience and efficiency of text messaging come with a complex web of guidelines and legal regulations that organizations must navigate to ensure compliance and security.
Understanding these regulations is critical to safeguarding your operations and maintaining trust with your consumers, and failure to comply can lead to severe consequences, including account suspensions, legal penalties, and damage to your reputation.
How to Stay In Compliance from a Provider’s Perspective
Cloud communication providers typically establish guidelines and compliance standards for sending out SMS communications through their platforms. These guidelines are designed to ensure that users, including businesses and developers, adhere to relevant legal regulations and industry best practices.
While specific guidelines may vary among providers, some common aspects include:
- User Consent:
- Providers often require users to obtain explicit consent from recipients before sending SMS messages.
- Consent should be obtained in a clear and transparent manner, and users should have the option to opt-out of receiving further messages.
- Content Policies:
- Cloud communication providers may have policies regarding the content of SMS messages sent through their platforms.
- Messages should adhere to ethical standards, avoid spam-like characteristics, and refrain from containing misleading or inappropriate content.
- Compliance with Laws and Regulations:
- Providers typically expect users to comply with applicable laws and regulations, such as the Telephone Consumer Protection Act (TCPA) in the United States or the General Data Protection Regulation (GDPR) in the European Union.
- This includes obtaining proper consent, respecting user privacy, and honoring opt-out requests.
- Anti-Spam Measures:
- Cloud communication providers often implement anti-spam measures to prevent abuse of their platforms.
- Users sending large volumes of messages, especially if flagged as potential spam, may face additional scrutiny or restrictions.
- Security Standards:
- Providers may have security standards in place to protect against unauthorized access and ensure the confidentiality and integrity of user data.
- Users are typically expected to follow secure practices to safeguard sensitive information.
Consequences for non-compliance with cloud communication providers’ guidelines can vary but may include:
- Account Suspension or Termination: Providers may suspend or terminate the accounts of users who repeatedly violate their guidelines. This action helps protect the provider’s reputation and maintain the integrity of their communication services.
- Restrictions on Service Usage: Non-compliant users may face restrictions on their ability to use certain features or services within the provider’s platform.
- Legal Consequences: If users’ actions lead to legal issues, the cloud communication provider may cooperate with authorities and provide necessary information, which could result in legal consequences for the user.
- Loss of Trust: Non-compliance can lead to a loss of trust among users and customers, impacting the user’s reputation and potentially resulting in a loss of business.
Ensuring You’re in Compliance with Carriers
Carrier guidelines for sending SMS communications typically aim to ensure that businesses and individuals adhere to industry standards and legal requirements, promoting responsible and ethical messaging.
Here are some common aspects of carrier guidelines:
- Consent Requirements:
- Carriers often require businesses to obtain explicit consent from recipients before sending commercial SMS messages.
- Consent should be clear, informed, and obtained through a transparent opt-in process.
- Opt-Out Mechanism:
- Carriers mandate the inclusion of a clear and easy opt-out mechanism in each SMS communication.
- Users should be able to opt out of receiving messages at any time, and businesses must promptly honor opt-out requests.
- Content Policies:
- Messages should adhere to content guidelines, avoiding spam-like characteristics, deceptive practices, or inappropriate content.
- Carriers may actively monitor for spam and abuse, taking action against violators.
- Sender Identification:
- Businesses are typically required to use clear and recognizable sender IDs in their SMS communications.
- This contributes to transparency and helps users identify the source of the messages.
- Frequency Limits: Carriers may impose restrictions on the frequency of messages sent to a particular user to prevent spamming.
The consequences for not being in compliance with carriers may include:
- Message Blocking: Carriers have mechanisms to block messages from senders or shortcodes that violate their guidelines or are flagged as spam. Message blocking can impact the sender’s ability to reach their audience.
- Account Suspension or Termination: Non-compliance with carrier guidelines can lead to the suspension or termination of the sender’s account. This action is taken to protect users and maintain the integrity of the carrier’s messaging services.
- Financial Penalties: Carriers may impose fines or penalties on businesses that do not comply with their guidelines. Financial consequences are often used as a deterrent for non-compliance.
- Legal Consequences: Non-compliance with carrier guidelines may lead to legal consequences, especially if the violation involves breaches of relevant laws and regulations. Businesses may face legal actions from regulatory authorities or individuals affected by non-compliant messaging practices.
- Reputation Damage: Non-compliance can result in reputational damage for businesses. Users are likely to lose trust in senders who do not adhere to ethical messaging practices.
To take it one step further, compliance guidelines can vary from one carrier to another. Here’s a look at how some of the largest carriers operate in terms of compliance:
T-Mobile:
- Compliance with CTIA Guidelines: T-Mobile, like other carriers, expects businesses to adhere to the guidelines set by the Cellular Telecommunications Industry Association (CTIA). This includes obtaining proper consent and providing opt-out mechanisms.
- Spam and Abuse Monitoring: T-Mobile actively monitors for spam and abuse. Sending messages that violate their policies can result in consequences.
AT&T:
- CTIA Compliance: Similar to other carriers, AT&T requires compliance with CTIA guidelines for SMS communications.
- Consent Requirements: AT&T typically emphasizes the importance of obtaining consent from users before sending commercial SMS messages.
- Monitoring and Filtering: AT&T employs mechanisms to monitor and filter out potentially unwanted or spam messages. Non-compliance can lead to message blocking or other consequences.
Verizon:
- CTIA Compliance: Verizon, like other major carriers, expects businesses to adhere to CTIA guidelines for SMS communications.
- User Consent: Obtaining clear and documented consent from users is a standard practice for Verizon. Businesses must ensure that users explicitly opt-in to receive SMS messages.
- Anti-Spam Measures: Verizon employs anti-spam measures to protect users. Non-compliance with these measures can result in consequences for the sender.
Compliance from a Legal Perspective
Legal guidelines for sending SMS communications vary across jurisdictions, and it’s crucial for businesses to be aware of and comply with the specific regulations applicable to their operations.
Here are some common legal considerations, particularly in the context of the United States:
- Telephone Consumer Protection Act (TCPA): The TCPA is a key U.S. federal law governing telemarketing activities, including SMS marketing. Under the TCPA, businesses are required to obtain prior express written consent from recipients before sending commercial SMS messages. The law also mandates the inclusion of an opt-out mechanism in each message, and businesses must honor opt-out requests promptly.
- Consent Requirements: Consent is a fundamental aspect of SMS compliance. Businesses should ensure that they have obtained clear and documented consent from individuals before sending them commercial SMS messages. Consent should include information about the type of messages the recipient will receive.
- Do-Not-Call Registry: The National Do-Not-Call Registry is managed by the Federal Trade Commission (FTC) in the United States. Businesses engaged in telemarketing, including SMS marketing, should scrub their contact lists against the registry to avoid contacting individuals who have opted not to receive such communications.
- Fair Debt Collection Practices Act (FDCPA): If SMS messages are used for debt collection purposes, businesses must comply with the FDCPA, which regulates the activities of debt collectors and prohibits certain practices.
- State Laws: In addition to federal laws, businesses must be aware of and comply with state-specific regulations. Some states have enacted their own laws governing telemarketing and SMS communications, which may impose additional requirements.
Non-compliance with SMS marketing regulations can result in legal consequences and financial penalties. Businesses may face lawsuits from individuals who believe their rights under the law have been violated.
Regulatory authorities, such as the Federal Communications Commission (FCC) in the U.S., can also take enforcement actions against non-compliant entities, imposing fines and other penalties.
Additionally, a negative public perception can harm a business’s reputation if it is perceived as engaging in intrusive or non-compliant SMS marketing practices.
A Look at Compliance from a Consumer Perspective
Consumers are protected by various guidelines and regulations when it comes to receiving SMS communications from businesses. These regulations aim to ensure transparency, protect privacy, and prevent unsolicited or intrusive messages.
Key guidelines and legal consequences include:
- Consent Requirements:
- Businesses are generally required to obtain explicit consent from consumers before sending commercial SMS messages.
- Consent should be clear, informed, and obtained without coercion. It often involves an opt-in process where individuals actively agree to receive messages.
- Opt-Out Mechanism:
- Businesses must provide a straightforward and free-of-charge method for consumers to opt out of receiving further SMS communications.
- Once a consumer opts out, businesses are legally obligated to honor this request promptly and cease sending messages.
- The Telephone Consumer Protection Act (TCPA):
- In the United States, the TCPA regulates telemarketing activities, including SMS marketing. It mandates businesses to obtain prior express written consent from consumers before sending commercial SMS messages.
- The TCPA also requires the inclusion of an opt-out mechanism and places restrictions on the use of automated dialing systems.
- Data Privacy Laws:
- General data protection regulations, such as the General Data Protection Regulation (GDPR) in the European Union, impose strict requirements on the processing of personal data, including mobile numbers used for SMS communications.
- Businesses must ensure compliance with these laws, including obtaining lawful grounds for processing personal information.
- Fair Debt Collection Practices Act (FDCPA):
- If SMS messages are used for debt collection purposes, businesses must comply with the FDCPA, which places restrictions on the practices of debt collectors.
- Do-Not-Call Lists:
- Some jurisdictions maintain Do-Not-Call lists that individuals can join to opt out of receiving unsolicited marketing messages, including SMS communications.
Legal consequences for non-compliance may include:
- Fines and Penalties: Non-compliance with SMS marketing regulations can result in significant fines imposed by regulatory authorities. For instance, violations of the TCPA can lead to statutory damages per violation.
- Lawsuits: Consumers have the right to take legal action against businesses for non-compliance. This can result in legal expenses, damages, and harm to the business’s reputation.
- Regulatory Action: Regulatory bodies, such as the Federal Communications Commission (FCC) in the United States, can take enforcement actions against businesses that violate SMS marketing regulations.
A Quick Note on Consumer Consent
A critical aspect of leveraging an SMS solution for outreach is ensuring that you have obtained the proper legal consent. On December 13, 2023, the FCC’s guidelines on consent became more strict, as they voted to close the “lead generator” loophole.
Simply put, this means that one-to-one consent is required for calls or texts made to consumers by goods or service providers. Businesses will be required to be in full compliance with these new regulations by January 27, 2025.
For more on this topic, check out this guide outlining the changes that will be taking place.
Beyond Compliance: Additional Complexities of In-House SMS
While compliance is a major factor when it comes to managing an in-house SMS solution (which also involves monitoring daily errors, staying on top of regulations, and maintaining good relationships with the carriers), there are a number of other complex details that cannot be overlooked.
Hiring the tech team to build the platform (which is no easy feat) is probably the most obvious, but once you’ve done that, you’ll also need to consider things like:
- Opt-in language on your website
- A2P10 DLC registration
- Commissioning phone numbers that can be used for texting campaigns, and monitoring those numbers to ensure deliverability
- Creating decision trees and messaging scripts
- Becoming knowledgeable on carrier “forbidden message categories”
- Optimizing scripts to keep up with changing compliance regulations
- Customer reporting and insights on lead activity
- Figuring out how to do all of the above at scale and profitably!
Conclusion
Navigating the intricacies of in-house SMS platforms is not an easy task. Companies must thoroughly acquaint themselves with the TCPA and other relevant legislation to avoid legal pitfalls. It’s also essential to implement state-specific, federal, and international regulations when crafting messages, which can be complex and demanding.
Additionally, managing an SMS platform in-house can bring hidden costs and risks, often underestimated by businesses.
When it comes to assessing whether or not your organization should build an SMS solution in-house, consider asking yourself this: Would you build your own marketing automation software?
Engaging with an SMS communications software company, like Verse.ai, unlocks a wealth of knowledge, technology, and scalability that in-house platforms are hard-pressed to match.
These providers come equipped with prebuilt compliance checklists, rigorous security measures, and a breadth of experience handling SMS regulations, ensuring that SMS campaigns are delivered compliantly. This frees up businesses to focus on their core competencies, helping them save time and money while driving revenue.
Most importantly, using a reliable SMS communications software company that stays abreast of and consistently monitors new laws and regulations is crucial for several reasons:
- Legal Compliance: Adhering to laws and regulations ensures that businesses operate within legal boundaries, reducing the risk of legal consequences and associated penalties.
- Trust and Reputation: Compliance with laws and regulations builds trust with customers, demonstrating a commitment to ethical practices and protecting the business’s reputation.
- User Consent and Privacy: Following regulations ensure proper user consent is obtained before sending SMS messages, respecting individual privacy rights and preferences.
- Avoidance of Penalties: Compliance helps businesses avoid fines, penalties, and other consequences imposed by regulatory authorities or carriers for non-compliant SMS practices.
- Message Deliverability: Reliable SMS software companies with compliance measures in place are less likely to face message blocking by carriers, ensuring better deliverability to customers.
- Adaptation to Changing Laws: Monitoring for new laws and regulations allows the software company to adapt quickly, ensuring ongoing compliance with evolving legal requirements.
- Effective Communication: Compliant SMS practices contribute to effective and meaningful communication with customers, fostering positive engagement and preventing annoyance or mistrust.
- Mitigation of Risks: Regular monitoring and adherence to laws help businesses proactively identify and mitigate risks associated with SMS communications, including legal and reputational risks.
In essence, relying on a trustworthy SMS communications software company that prioritizes legal compliance and stays vigilant about regulatory changes is essential for businesses seeking to maintain a positive relationship with customers, minimize risks, and navigate the evolving landscape of SMS communications responsibly.
Adding SMS to Your Customer Engagement Strategy: Next Steps
When it comes to SMS, there’s a lot to think about, and even more to manage, if you’re trying to handle everything in-house. If you’re interested in adding SMS to your customer engagement strategy, schedule some time to talk to Verse about your options.
At a glance, Verse is a fully-managed SMS solution, which means we handle everything for you, from compliance and carrier relations to integration and implementation, script writing, campaign monitoring, and more!
With Verse, you’ll de-risk your investment in SMS so you can focus on what matters most.
Please note, this blog post is for informational purposes only, and should not be considered as legal advice.
