Texas Senate Bill 140 (SB 140) amends the Texas Business & Commerce Code and significantly expands the state’s telemarketing regulations to include text and multimedia (SMS/MMS) messages, thus imposing new compliance obligations on businesses that communicate with Texas consumers.

What Is Happening?

Effective September 1st, the Texas Telephone Solicitation Act now defines “telephone solicitations” to include text and multimedia messages. Any business sending marketing messages to consumers in Texas or from a Texas location must comply with these updated regulations. The law aims to provide consumers with greater protection against unsolicited commercial messages.

Key Compliance Requirements

SB 140 introduces a mandatory registration process for businesses that send text and multimedia messages. Unless a specific exemption applies, such business must:

• • Register with the Texas Secretary of State: Businesses subject to this law must file a registration statement (Form 3401) for each business location where SMS/MMS solicitations are made. The registration statement is detailed and requires disclosure of certain organizational and sales information. This registration is effective for one year and should be renewed annually.
  • Pay a $200 Filing Fee. A $200 filing fee is required for each renewal.
  • Post a $10,000 Security Deposit: The security deposit can be in the form of a surety bond, irrevocable letter of credit, or certificate of deposit.

Is Your Business Exempt from Registration?

Chapter 302 of the statute lists several exemptions. One important exemption exists for businesses that meet both of the following criteria:

1. 1. The business has operated under the same business name for at least two years.
   2. The business sends solicitations exclusively to its own current or former customers.

The term “customer” is not defined in this part of the statute, creating a gray area for when this exemption applies. To minimize the risk presented by this gray area, businesses claiming this exemption might choose to adopt a conservative approach by limiting their marketing lists to individuals who have previously purchased goods or services.

Ongoing Obligations for ALL Businesses

Even if they are exempt from the registration requirement, affected companies must still adhere to other sections of the Telephone Solicitation Act. This includes:

• • Quiet Hours: No messages may be sent between 9:00 p.m. and 9:00 a.m. Monday–Saturday, or before 12 p.m. or after 9:00 p.m. on Sunday. (Texas local time)
  • Express Consent: Businesses must obtain and document clear, affirmative consent from Texas consumers before sending marketing texts.
  • Do-Not-Call Lists: Businesses must honor the Texas and National Do-Not-Call registries.
  • Opt-Out Mechanism: All messages must provide a simple and immediate way for Texas consumers to opt out of future communications.

Penalties for Noncompliance

The financial risks associated with noncompliance are substantial:

• • Failure to register can result in penalties of $5,000 per violation, with each non-compliant message potentially counting as a separate violation.
  • The law also creates a private right of action, allowing consumers to file lawsuits directly under the Deceptive Trade Practices Act (DTPA) and potentially recover treble damages, attorney’s fees, and damages for mental anguish.

Compliance

Companies who use SMS/MMS marketing should take action to ensure compliance with SB 140 and the federal Telephone Consumer Protection Act (TCPA).

1. 1. Audit SMS/MMS Programs: Conduct a thorough review of current message marketing practices. Verify how, when, and from whom consent was obtained and review opt-out mechanisms.
   2. Determine Exemption Status: Carefully assess if an exemption applies. If there is uncertainty, the most prudent course of action is to register with the state.
   3. Verify Compliance Systems: Ensure that any marketing platform is configured to respect Texas quiet hours and that opt-out processes are functioning correctly.
   4. Strengthen Record-Keeping: Maintain complete records of consumer consent, opt-out requests, and the timing of all messages sent, which could be helpful to defend against a future complaint or legal action.

The expansion of Texas’ telephone solicitation laws presents a new layer of regulatory complexity for retail marketing. A proactive and conservative approach to compliance can mitigate risk while continuing to leverage a valuable communication medium. Consulting with legal counsel can help align marketing practices align with the new requirements of Texas law.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.