Q: Our agency just got an office texting line. Do we need to ask for consent before texting with a prospect or client? Is a verbal response acceptable or is there a formal way we need to document proof of consent prior to texting? Our text software does have an opt-out option at the bottom of the first text. 

Response 1: The national Big “I" Office of the General Counsel published a memo on texting with clients that advised getting written consent from clients before sending them texts. To quote:

As background, the Federal Communications Commission (“FCC") has broadly interpreted the Telephone Consumer Protection Act (“TCPA") to prohibit nearly all commercial text messaging (aka, short message service or SMS) on any device that qualifies as an “automatic telephone dialing system" (ATDS) or autodialer. Unlike the rules for some commercial communications, the TCPA does not provide an exemption for an existing business relationship. Moreover, the FCC has found a consumer may generally revoke consent to texting using “any reasonable manner that clearly expresses his or her desire."

The memo continues:

Expressing concern that the TCPA could be “read to render every smartphone an ATDS," the D.C. Circuit struck down broad guidance issued by the FCC in a 2015 decision … In April 2021, the Supreme Court brought some clarity to the issue in the case of Facebook v. Duguid. The Court ruled that a device must have the capacity to either store or produce a telephone number using a random or sequential number generator, as opposed to merely having the capacity to store and dial numbers automatically. While this is an important and helpful decision that should significantly curb TCPA litigation in the future, there are some caveats.

Whether consent is expressly required by the TCPA is an open question that turns on how texting is implemented. For example, what device and software is used and whether it could constitute an autodialer or uses a prerecorded voice.

It is best practice to obtain written opt-in consent regardless to be on the safe side in an area that has generated a lot of litigation and as good business practice to help ensure you are not annoying clients.

Response 2: The FCC has rules and regulations concerning electronic communications. Contact your attorney to formalize your approach and be prepared to update as the laws evolve. They will provide the legal format of all applicable warnings.

Make sure you have the proper coverage that may include any financial or legal transactions that impact the privacy of your clients or a legal representative—in particular, cyber liability coverage.

Response 3: I think you need an opinion from a legal authority. From a personal standpoint, I can tell you that getting an unsolicited phone text from an insurance agent prospecting for customers would make me quite angry. Likewise, as a customer, I would only want a very rare text regarding perhaps a pending nonrenewal or a reminder to consider flood insurance.

Response 4: Any request or approval from a named insured—or first named insured in commercial lines—can be documented with an activity in your system unless the state has a regulation requiring a certain form to be signed. I do not know of any states that do so in regard to texting. However, errors & omissions carriers counsel not to reply to insurance questions in texts because by nature, texts are short and sweet and insurance is just the opposite.

Better to reply by phone (even voice mail) or email to a texted question or concern from your client. If it is a quick "yes" or "no" about logistics, that would be OK by text. Use your good judgment. Whatever or however you reply, keep a running activity record in your system. That is essential.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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