SMS Marketing Compliance: Laws, Best Practices, and Privacy Policy Updates

SMS marketing is a powerful tool for engaging with customers, but businesses must follow SMS marketing compliance regulations to avoid legal risks. Text message marketing is governed by strict laws that protect consumer privacy and prevent spam. Companies that fail to comply with these regulations may face lawsuits, hefty fines, or carrier-imposed message blocks.

To legally send SMS messages, businesses must obtain proper recipient consent, provide clear opt-in and opt-out options, and ensure transparency in their data collection practices. Key regulations, including the Telephone Consumer Protection Act (TCPA) in the U.S., the General Data Protection Regulation (GDPR) in Europe, and the California Consumer Privacy Act (CCPA), dictate how businesses can collect and use mobile numbers for marketing purposes.

This guide explores the history of SMS privacy laws, outlines current compliance requirements, and highlights Bandwidth’s role as an underlying carrier ensuring compliance with 10DLC (10-Digit Long Code) registration. Additionally, updating website privacy policies is essential for businesses using SMS marketing. Understanding these regulations and best practices will help businesses build trust with their audience while avoiding legal repercussions.

The Background of Privacy Regulations and SMS

Evolution of SMS Messaging

The history of SMS (Short Message Service) dates back to 1992, when engineer Neil Papworth sent the world’s first text message, “Merry Christmas,” to a Vodafone executive. This moment marked the beginning of an era in communication. By the early 2000s, SMS had evolved into a dominant form of personal and business communication, allowing people to exchange messages instantly.

Businesses saw the potential of SMS for client engagement as the use of mobile phones increased dramatically. Text messaging evolved into a straightforward and powerful marketing tool for everything from appointment reminders to special offers. With an open rate of over 90%, SMS messages are one of the most dependable ways to reach clients, in contrast to emails, which are frequently ignored.

But difficulties also accompanied this expansion. As companies started using SMS for marketing, the increase in spam texts raised serious privacy issues for customers. Inboxes were overflowing with unsolicited messages, which irritated customers and drew attention from authorities. Governments throughout the world have responded to these worries by enacting laws and rules that shield customers against unsanctioned usage of their phone numbers and spam.

Key Privacy Laws Regulating SMS Messaging

Several privacy laws regulate how businesses can collect and use phone numbers for SMS marketing. These laws ensure consumers have control over their data and prevent businesses from sending unwanted messages.

1. Telephone Consumer Protection Act (TCPA) – 1991

The TCPA, enforced by the Federal Communications Commission (FCC), was one of the first laws to regulate telemarketing and SMS communication. While it originally focused on telemarketing calls, it later expanded to cover text messages.

Key provisions of the TCPA include:

Prior Express Consent: Businesses must obtain explicit permission before sending SMS marketing messages.
Opt-Out Requirement: Every SMS must include a clear and simple way for recipients to opt-out (e.g., “Reply STOP to unsubscribe”).
Penalties for Violations: Businesses that fail to comply can face fines of up to $1,500 per unsolicited message, leading to potential lawsuits and significant financial consequences.

2. CAN-SPAM Act – 2003

The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act was originally designed for email marketing but was later extended to cover SMS marketing. This law requires businesses to:

Clearly identify the sender in all messages.
Provide an opt-out mechanism that allows recipients to stop receiving messages.
Include a valid company contact address in every marketing SMS.

While not as strict as the TCPA, businesses must still comply with CAN-SPAM to avoid regulatory issues.

3. General Data Protection Regulation (GDPR) – 2018

The GDPR, enacted by the European Union (EU), applies to businesses operating in the EU or communicating with EU residents. This law is particularly strict about consumer data privacy and includes specific SMS marketing rules:

Explicit Consent: Businesses must obtain clear and affirmative consent before sending marketing messages.
Consumer Data Rights: Recipients can access, modify, or delete their data upon request.
Transparency Requirements: Businesses must clearly explain why and how they use customer phone numbers.

Failing to comply with GDPR can result in hefty fines, sometimes reaching millions of euros, making compliance essential for international businesses.

4. California Consumer Privacy Act (CCPA) – 2020

The CCPA grants California residents greater control over their personal data, including their phone numbers. Under this law, businesses must:

Disclose data collection practices and inform consumers how their data will be used.
Allow consumers to opt out of SMS communications and data-sharing activities.
Provide access to collected data, enabling customers to request deletion of their information.

Businesses must adhere to SMS marketing best practices because non-compliance with the CCPA can lead to fines and legal action.

Business Requirements for SMS Compliance

Why SMS Campaign Registration is Required

Businesses that utilize text messaging for marketing, customer service, or notifications must first register their SMS campaigns. In order to protect customers from spam and fraudulent communications and to assure compliance with industry and federal rules, mobile carriers need businesses to register their campaigns.

Prevents Spam and Fraud: Unregistered SMS campaigns can contribute to message overload and potential scams. Registration helps filter out unsolicited or deceptive messages before they reach consumers.
Ensures Compliance with Federal and Industry Regulations: Laws such as the TCPA (Telephone Consumer Protection Act) and the CAN-SPAM Act mandate clear guidelines for business texting. Registration ensures adherence to these requirements, reducing the risk of legal penalties.
Protects Consumers from Unwanted Messages: By requiring businesses to obtain prior consent before sending SMS messages, registration safeguards consumer privacy and prevents unsolicited communications.

Failure to register an SMS campaign can lead to message blocking, fines, or even loss of business messaging privileges from carriers.

Key Components of SMS Campaign Registration

To successfully register an SMS campaign, businesses must provide detailed information about their messaging practices and compliance measures.

1. Campaign Description

Businesses must submit a campaign description detailing:

Business type (e.g., healthcare, finance, retail, education)
Purpose of SMS messages (e.g., promotional offers, appointment reminders, customer support)
Intended recipients (e.g., customers, employees, or both)
Message frequency (e.g., daily, weekly, or on-demand)
Compliance statement confirming that messages will not include unsolicited marketing unless the recipient has explicitly opted in

This transparency ensures that mobile carriers approve messages aligned with legal and industry standards.

2. SMS Opt-In Methods

Businesses must use compliant opt-in methods to collect consumer consent before sending SMS messages. Acceptable methods include:

a. Verbal Opt-In

Customers give consent during a phone call or in person.
Businesses must record and log verbal consent for legal protection.

b. Keyword-Based (Implied) Opt-In

Customers text a keyword (e.g., “JOIN” or “START”) to subscribe.
A confirmation message must immediately follow, including:
- Business name
- Message frequency
- Opt-out instructions (e.g., “Reply STOP to unsubscribe”)

c. Written Opt-In

Customers sign a physical or digital form agreeing to receive SMS messages.
The form must include a clear statement explaining how their phone number will be used.

d. Web Opt-In

Customers enter their phone numbers through an online form.
A consent checkbox must be included (pre-checked boxes are not permitted).
The privacy policy must be linked directly on the form, outlining SMS usage.

Using multiple opt-in methods ensures compliance with various consumer preferences and legal requirements.

3. Privacy Policy and Terms & Conditions Updates

Businesses must update their privacy policies, terms, and conditions to reflect SMS compliance requirements. Key updates include:

Disclosure of SMS messaging practices, specifying how phone numbers are collected, stored, and used.
Terms outlining opt-in and opt-out processes, ensuring customers can unsubscribe at any time.
Data-sharing policies clarify whether mobile numbers will be shared with third parties.

4. Sample SMS Messages

As part of the registration process, businesses must submit sample SMS messages for carrier approval. These messages must:

Clearly identify the business
Include opt-out instructions (e.g., “Reply STOP to unsubscribe”)
Match the registered campaign description

Example SMS Message for Opt-In Confirmation:

"Thank you for signing up for [Business Name] updates! Expect 2-3 messages per month. Reply STOP to unsubscribe. Standard message & data rates apply."

By adhering to these registration requirements, businesses can maintain SMS marketing compliance, avoid message blocking, and foster trust with their audience.

Bandwidth’s Role as an SMS Carrier

Who is Bandwidth?

Bandwidth is a leading telecommunications provider that supplies 10DLC (10-Digit Long Code) numbers for A2P (Application-to-Person) messaging. As an industry leader, Bandwidth ensures that businesses using SMS for marketing, notifications, or customer service comply with carrier regulations and avoid messaging disruptions.

B. Why Bandwidth is Important for SMS Compliance

10DLC Registration and Vetting
- Businesses must register their brand and SMS campaigns with Bandwidth to meet compliance standards.
- Registration includes submitting opt-in processes, privacy policies, and sample messages for approval.
Filtering and Message Approval
- Bandwidth helps prevent spam by blocking non-compliant messages before they reach consumers.
Preventing Legal and Financial Consequences
- Businesses that fail to register campaigns properly may face fines, service interruptions, or carrier bans.

C. Bandwidth’s 10DLC Compliance Checklist

Brand Registration: Submit accurate business details.
Opt-In Message Requirements: Include brand name, message frequency, and opt-out instructions (e.g., “Reply STOP to unsubscribe”).
Opt-Out Message Requirements: Ensure confirmation of message cessation.
Privacy Policy & Terms: Provide a clear link in the opt-in process.

Updating Your Website Privacy Policy for SMS Compliance

Why Privacy Policy Updates Are Necessary

For businesses using SMS marketing, keeping a clear and up-to-date privacy policy is essential for compliance and consumer trust. A well-structured privacy policy ensures businesses follow federal and industry regulations while protecting customer data.

Clarifies Data Collection and Usage Practices
- Businesses must explain why they collect phone numbers and how they will be used for SMS communications.
- Customers should know whether their data will be used strictly for business purposes or shared with third parties.
Specifies Opt-In and Opt-Out Procedures
- The policy should outline the process for opting into SMS messaging, whether through verbal, written, or digital consent.
- Inform customers of their right to opt-out at any time and provide a simple method.
Ensures Transparency and Legal Protection
- A clearly stated privacy policy helps businesses comply with laws like TCPA, GDPR, and CCPA.
- Transparency reduces legal risks by demonstrating that the business follows industry best practices for consumer protection.

Example SMS Privacy Policy Language

"By providing your mobile number, you consent to receive SMS messages from [Company Name] for a specific purpose, such as appointment reminders or promotional offers." Message frequency may vary. Standard message and data rates may apply. No mobile information will be shared with third parties. Reply STOP to unsubscribe or HELP for assistance."

This type of privacy statement ensures compliance, transparency, and consumer trust while preventing legal issues related to SMS marketing.

Best Practices for SMS Compliance

Businesses must go by carrier requirements and industry laws to conduct an SMS marketing campaign that is both successful and compliant with the law. Adopting best practices guarantees unbroken message delivery, legal protection, and customer trust.

Ensure Opt-In is Clear and Transparent

Businesses must get the receivers' express agreement before sending SMS texts. Whether by verbal agreements, online forms, or keyword-based memberships, opt-in techniques should be made explicit. Consumers must be well aware of the frequency and content of the messages they are subscribing to.

Provide Easy Opt-Out Options

Every SMS campaign must include a simple and effective way for recipients to unsubscribe. Standard opt-out language, such as "Reply STOP to unsubscribe," should be included in every message. Businesses must immediately honor opt-out requests to avoid compliance violations and potential penalties.

Maintain Records of Consent

Keeping detailed records of how and when a customer opts in protects businesses from legal disputes. These records should include:

The date and time of consent
The method of opt-in (verbal, web form, keyword, written)
A copy of the opt-in confirmation message

Regularly Update Privacy Policies and Terms

As regulations evolve, businesses must review and update their privacy policies to reflect any changes in SMS data collection and usage. Keeping policies up to date ensures compliance with TCPA, GDPR, and CCPA while maintaining transparency with consumers.

Properly Register SMS Campaigns to Avoid Blocking

Mobile carriers require businesses to register their SMS campaigns to prevent spam and fraud. Proper registration through 10DLC providers like Bandwidth ensures message deliverability and compliance with industry standards. Failure to register can lead to message filtering, fines, or complete service suspension.

Ensuring SMS Compliance for Long-Term Success

Maintaining SMS compliance is crucial for businesses that use text messaging as a marketing or communication tool. Failing to follow regulations can result in fines, legal action, and message blocking, ultimately damaging a company’s reputation and customer relationships.

To stay compliant, businesses should:

Register their SMS campaigns with carriers to ensure message deliverability.
Use legally approved opt-in methods (verbal, written, keyword-based, or web-based).
Provide clear opt-out options and honor unsubscribe requests immediately.
Regularly update privacy policies, terms, and conditions to reflect current compliance requirements.

By implementing these steps, businesses can protect themselves from legal risks while building trust and engagement with their audience. For expert guidance on SMS compliance and marketing strategies, contact SP Marketing Experts today.

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Kenneth Robinson
I use SP Marketing for a number of things but I have to mention how useful it’s been having them help with Google Pay per click management. This company is fantastic at what they do. They are on top of everything and they are always so professional. I really don’t know what I would do without them. If you need any kind of digital marketing help this is the first place I would recommend. They put a lot of emphasis on customer care and they have really helped my business grow.
Joseph Qrtiz
We hired SP Marketing to run online and social media ads for our company. I wasn’t really sure what to expect but decided it was worth a shot. The uptick in sales has been wonderful. These guys really know what they’re doing and their ads have brought us so many new customers. I’m so thankful. I highly recommend them.
Cherry Peterson
I just love SP Marketing Experts. I needed some major help with link and citation building and these guys were able to handle everything for me. Their services have been so useful. I can't remember the last time I worked with a company that had such great customer service. If you're looking for any kind of digital marketing help for your company this is the first and only company I would recommend.
Harry Warner
SP Marketing helped us completely redo our website. The old one was such a mess and we needed so much help. The end result was modern, easy to read, and very user friendly. I couldn’t be happier with their services. They did such a great job for us. I would 100% recommend them to anyone who has a business and needs website or marketing help. They do a fantastic job. They really delivered for us.
Angela Tolbert
In order to stay competitive as a business you have to be regularly posting on social media. However, I own a small business and managing my own social media while I’m trying to run a company isn’t really productive. Thankfully, I found SP Marketing. They have been great. They do all of our social posts for us so that I don’t have to worry about it. It’s really helped the business grow. They are very professional and very easy to work with. I don’t know what I did without them.

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Statistical Performance Marketing is a digital marketing agency and web design firm specializing in a variety of online marketing channels. Since our founding in 1999, it has been our goal to help all businesses run more efficiently and effectively online with outreach and remarketing campaigns. Combined, our team of designers, developers, and marketing experts have over 40 years of experience and an ever-growing drive for success.