Text Messaging for Credit Unions

The FCC/TCPA compliance angle and more..

The Text messaging revolution is here. 8 billion text messages are sent every day in the U.S. - which makes it 30 texts per day per adult. People are hooked to messaging their friends and family - Americans text five times as often as they call. This text messaging revolution is beginning to affect the way people interact with businesses. 9 out of 10 consumers say that they would like to be able to use Text Messaging to communicate with businesses. Most industries like Retail, Pharma, Travel and Financial Services are adopting text messaging to give their customers the experience they seek.

How are Credit Unions embracing Text Messaging?

Text Messaging provides the convenience that the credit union members want, especially when members are already using Texting to communicate with other businesses.
Some credit unions have started offering text banking to their members. Text banking, however, allows members to have a very limited interaction with the Credit Union - restricted to simple commands like bal, hist, etc.

How about using Text Messaging to have real, intelligent conversations?

Most Credit Unions are still on the fence about how to make this happen, the key hurdle being the clarity surrounding the FCC/TCPA regulations.

In this article - a first in the series, we publish our take on addressing the fear, uncertainty, and doubt (FUD) regarding the usage of text messaging for Credit Unions.

Beyond Text Banking, Credit Unions can leverage Text Messaging in three more ways (use cases):
Marketing – sending product offers, rate alerts, etc. to thousands of prospects and/or existing members via Text Campaigns.
Sales – a one-on-one Text conversation with a prospect or a member e.g. at or after a “tabling event”.
Service, Contact Center – a one-on-one or one-to-many Text conversation with existing members to resolve issues or for fraud alerts.

The FCC/TCPA rules vary according to the use cases. In this article, we will focus on the Marketing use case.

Understanding the TCPA/FCC Rules for Text Marketing/Advertising

The biggest concern that Credit Union leaders have around Text Messaging and FCC/TCPA compliance is getting consent. Here is our take on this issue -
FCC published a Public Notice in Nov 2016 that brings Texting under the purview of the Telephone Consumer Protection Act (TCPA).
In this public notice, FCC introduces a concept of “robotexts” similar to “robocalls” in the original TCPA statues. The definition of “robotexts” is “text messages sent to cell phones using any automatic telephone dialing system”.
Essentially, this notice mandates “prior express written consent” for robotexts especially for Advertising/Marketing use cases. Even though the notice provides exceptions to the prior express consent rule for “tax-exempt nonprofit organization(s)”, we recommend that obtaining prior express consent is a good practice for Credit Unions.
Thanks to the E-SIGN Act though, where a written agreement is required to satisfy the “prior express consent” requirement, it is sufficient to get the agreement electronically - e.g. via a text message or through a web form submission. As long as a proper electronic trail of the consent process is kept for the “the burden of proving that they obtained such consent”.

The TCPA lays out three disclosures to meet the “prior express written consent” requirement:
1. People must be made aware that they are signing up to receive multiple marketing messages via text;
2. The message must be clear and conspicuous;
3. Giving consent cannot be a condition of purchase.

In other words, when you ask members to sign-up for your marketing text messages, you have to tell them clearly what they are signing up for.
This disclosure must also be prominent and easy to read. You can’t bury a request for consent in the fine print of a form which is intended for some other purpose. The consent request should be positioned right next to where members are being asked for their cell phone numbers.
The goal of the request is to make sure that members can never turn around and say they didn’t know what would happen when they gave you their phone numbers.

The FCC has said that people should have a way to easily opt out of receiving text messages. A best practice is to periodically indicate the method of opt out. For example, if a member has opted-in for your text campaigns, then periodically text messages could be accompanied with "Text STOP to cancel".

The TCPA considers marketing text messages the equivalent of telemarketing calls. You may wish to follow the rules for telemarketing calls to residential numbers and only send the texts between 8AM and 9PM in the recipient’s time zone.

Methods of Obtaining Consent

There are multiple ways in which you can obtain consent. We, at Eltropy, are helping our clients obtain consent in the following ways -

Text Sign-Ups
One way is to get members to text a specific word to your number in order to give their consent. For example, Text “JOIN ABCCU” to 9999 to sign up for our Text Marketing offers. The signup text should be voluntarily initiated by the member. Once a member initiates the “JOIN ABCCU” text, a follow on text with the disclaimers is sent to the member, and upon acceptance of the disclaimer, the member is enrolled for Text marketing.
Credit Unions should not send mass text messages to members asking them to sign-up for their Text Marketing offers. Instead, the text messaging signup offer should be advertised using other channels, such as posters, billboards, TV, radio, online etc. Here is an example of how JoAnn Fabric advertises their text marketing offers online.

Email Campaigns and Web Forms
Another way you can obtain member consent is via email campaigns that direct the members to fill out a web form for Text Marketing sign-ups. Again, make sure that the web form is dedicated to the text messaging campaign and the wording is clear. Here is an example of how JoAnn Fabric advertises their text marketing offers online.

Paper Signatures
Lastly, you can obtain consent by getting people to sign a physical form. Several credit unions are adding TCPA consent language to their new membership form - which is a great idea!
Alternatively, separate paper forms for Text Marketing consent can be made available at branches, where your staff can interact directly with members and prospects. Just make sure that the form also includes the appropriate wording so that members know exactly what they are signing up for.

It is easier than it seems

We hope that this article helps you become more aware of the regulations regarding the Marketing use case for text messaging. The next post in this series will cover the sales use case and the ways in which your area managers/business development teams can be compliant while text messaging members.
Being compliant is not as difficult as some people think. It’s just a matter of following a few simple rules and documenting the paper trail - something in which Credit Unions excel.
The Retail industry is at the forefront of adopting messaging and reaping the benefits of a top-notch customer experience provided by the messaging channel. For example, my wife loves her weekly “10% off” Text coupons from JoAnn Fabric. Earlier, she would always forget the paper coupons at home, but now she always has her phone handy. All she has to do is to open up the right Text.
Credit Unions exist to serve their members - and give the members the experience they seek. If retailers, pharmacies, banks and many other industries are already enabling their customers to engage via Text Messaging, then why should Credit Unions lag behind?

This article is not a substitute for professional legal advice. We will be glad to connect your legal team to ours, so that they can understand these issues deeper.

About Eltropy
Eltropy provides a Text Messaging software platform for Financial Institutions. Eltropy’s technology solves three key challenges facing financial services firms as they adopt text messaging - governance and compliance, IT integrations and Business Intelligence. If you’re interested in knowing more, leave a comment below or email me ashish@eltropy.com.