Mobile Marketing Law: The mobile marketing law violated in the AT&T case was mobile cramming. This is a ‘”…modern version of a long-time scam in which consumers’ phone bills are used as a vehicle for unauthorized charges placed by third parties” (FTC, 2021).
Consequences: The FTC had to pay almost 2.7 million consumers over $88 million in refunds totaling about $31 a person because of the mobile cramming.
- Negative Consequences: The negative consequences to the consumers are added charges that they pay for unknowingly and without reason. The consumer is kept in the dark while the company makes more money off them.
Possible Penalties: Possible penalties levied on a company for violating legal considerations are mostly serious fines. The higher and more consistent the violation, the more fines incurred for the business. Some violations can include upwards of 10 years in federal prison.
Marketing Response: Marketers must consistently ask themselves if they are remaining ethical in any mobile marketing campaign. Understanding the specific policies and rules that apply to the type of mobile marketing campaign put together, is key to staying ethical. Anything needing the permission of consumers should be asked immediately along with any information about the business ready and easily accessible for all consumers. Transparency is key to the customers understanding the business. In addition, prohibiting the practices of spam calls and emails will be crucial.
FTC. (2019, August 22). Mobile Cramming. Federal Trade Commission. Retrieved October 10, 2021, from https://www.ftc.gov/news-events/media-resources/mobile-technology/mobile-cramming.
FTC. (2019, May 23). FTC providing over $88 million in refunds to AT&T customers who were subjected to mobile cramming. Federal Trade Commission. Retrieved October 10, 2021, from https://www.ftc.gov/news-events/press-releases/2016/12/ftc-providing-over-88-million-refunds-att-customers-who-were.
McGuireWoods. (2020, October 6). FTC fines: FTC chairman reminds companies that fines are the FTC’s strategic tool to deter noncompliance. JD Supra. Retrieved October 10, 2021, from https://www.jdsupra.com/legalnews/ftc-fines-ftc-chairman-reminds-51455/.