One under-utilized defense to Telephone Consumer Protection Act (TCPA) claims is reliance on the lead generator’s website Terms and Conditions. In particular, most website Terms include (or should include) a mandatory arbitration clause with a class action waiver, useful protections against a potentially devastating TCPA lawsuit. But the process for obtaining agreement to the Terms has specific requirements that must be met in order to be considered valid. One recent ruling from a Michigan federal court, Shirley v. Rocket Mortgage, laid out one path to ensure proper agreement to the Terms, including a valid TCPA arbitration clause; this set of requirements is something that digital marketers and lead generators should carefully note.
What does the Shirley decision say about TCPA arbitration clauses?
Dustin Shirley filled out a web form on LowerMyBills.com (LMB) to request information on refinancing his mortgage. In doing so, he also agreed to abide by LMB’s Terms, which included a mandatory arbitration clause. After submitting the information form on LMB’s website, Shirley agreed to Rocket Mortgage’s Terms as well, including another mandatory arbitration clause. When Shirley began receiving text messages from Rocket Mortgage, he eventually sued the company for violating the TCPA by sending unwanted texts.
In its papers, Rocket Mortgage moved to compel Shirley to pursue arbitration as the proper forum to resolve his dispute. It argued that the mandatory arbitration clause was clear and that Shirley’s assent to both sets of Terms barred him from litigating his claims in court. Shirley countered that the consent flow for both the LMB Terms and the Rocket Mortgage Terms failed to provide adequate notice, thus making the contract non-binding.
The Court ruled that the two consent provisions appearing on LowerMyBills.com provided sufficient notice and that Shirley must pursue his claims in arbitration, not in court. In evaluating LMB’s consent flow, the Court pointed out that the hyperlinks to the Terms were underlined and in blue, while other text was in gray and not underlined. Thus, the Court explained, a reasonable Internet user would understand that the blue, underlined words were hyperlinks to the Terms.
The Court also found that the consent statement below the “call-to-action” button contained the following sufficiently specific and unambiguous assent language: “By clicking the button above,” the user agrees to LMB’s Terms. In sum, the two pivotal elements that make this arbitration consent flow valid are: (1) the offset and obvious hyperlinks to the Terms; and (2) the unambiguous consent statement that tells the user exactly what clicking the button or checking a box means.
Why does the Shirley decision matter to your business?
Terms and Conditions are not just a pro forma feature of every website. They establish a binding agreement between the user and the website owner that provides clarity and predictability for future disputes. Ensuring that the Terms form a valid contract means paying attention to every detail of your website’s consent flow. The Shirley decision serves as a roadmap for companies to follow in order to obtain valid consent to their Terms, including provisions such as mandatory arbitration and a class action waiver.
Of course, the Shirley decision is just one ruling in one trial court. Other trial and appellate courts could evaluate a similar consent flow and find some degree of fault. Still, the Shirley decision gives website owners at least some parameters with which to evaluate the consent flows that they use. More than that, paying attention to these details can be the difference between facing an individual claim for a small amount in arbitration or a nationwide class action claim for hundreds of thousands of dollars in court.
Hire experienced marketing attorneys.
So many details go into making your consent flow valid, including:
- Whether the consent language is above or below the call-to-action button;
- The words used on the call-to-action button (e.g., “agree and submit” or “agree and continue”);
- What the consent language itself says; and
- The font size and color of the consent language.
The required level of detail can be minute and time consuming. And standards often change with updated regulations and new court decisions. The solution for online businesses is to hire experienced marketing attorneys to provide comprehensive guidance for your website consent flows, Terms, and Privacy Policies. The attorneys at Klein Moynihan Turco have years of experience assisting businesses with TCPA compliance, website Terms, Privacy Policies, and consent flows. We can help you stay TCPA compliant and help protect your business from company-threatening litigation.
The material contained herein is provided for informational purposes only and is not legal advice nor is it a substitute for seeking legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
Photo by Priscilla Du Preez on Unsplash
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