On February 25, 2025, the United States District Court for the Western District of Washington issued a cautionary decision for all businesses that employ “Refer a Friend” promotions. In Jensen v. Capital One Financial Corp., the Court held that Plaintiff had sufficiently plead claims against Defendant pursuant to Washington’s Commercial Electronic Mail Act (“CEMA”) and Consumer Protection Act (“CPA”), even though Defendant did not send the text messages at issue.
Plaintiff received the allegedly violative text message from one of her personal contacts as part of Defendant’s “Refer a Friend” credit card promotion. After Plaintiff filed her Complaint, Defendant responded by filing a Motion to Dismiss. Among other contentions, Defendant argued that Plaintiff failed to state a claim under CEMA because Defendant did not initiate or substantially assist in transmitting the allegedly violative text message. The Court denied Defendant’s Motion, providing a stark reminder that businesses need to ensure that text messages sent on their behalf must comport with telemarketing regulations, even if sent by consumers.
The Facts at Issue in the Jensen v. Capital One Financial Corp. “Refer a Friend” Proceeding
Defendant is a banking institution that offers, among other financial products, consumer credit cards. As part of its promotional offerings, Defendant instituted a “Refer a Friend” program whereby it pre-populated a text message that contained a sign up link for existing cardholders to copy and send to their personal contacts. The promotion was accessible via Defendant’s website and mobile app. In the mobile app, language underneath the referral button read: “You confirm that you have consent to send text messages to each recipient. You may edit the pre-filled messages as desired.”
Insofar as the laws at issue in this proceeding are concerned, CEMA imposes liability for businesses that “initiate” or “assist” in transmitting commercial text messages to cellular telephone numbers. CEMA defines “assist” as “substantial assistance or support which enables any person to formulate, compose, send, originate, initiate, or transmit” text messages knowing that the initiator will violate the CPA. An unsolicited commercial text message is considered an unfair or deceptive act under the CPA. Acquiring consumer prior express consent is a defense to CEMA violations.
Plaintiff received a “Refer a Friend” text message, in the original form generated by Defendant, from one of her personal contacts. She subsequently filed this class-action lawsuit on behalf of herself and all Washington State consumers who received Defendant’s “Refer a Friend” text messages.
Why Did the Court Decide Against Defendant?
In its Motion to Dismiss, Defendant conceded that it assisted its customers with sending the “Refer a Friend” text messages, but argued that this assistance was not substantial. For example, Defendant explained that it did not have any control over when or how the subject text messages were sent. The Court found, however, that the generation of the canned text message language and inclusion of the referral link could constitute “substantial assistance.”
Defendant also argued that, because it provided the consent disclosure as part of the “Refer a Friend” promotion, it did not substantially assist its consumers in violating CEMA or the CPA. The Court decided that this disclosure was insufficient because it asked customers to confirm recipient consent to text messages in general, as opposed to the particular “Refer a Friend” text message. In addition to the consent notice lacking specificity, the Court noted that the language only appeared in Defendant’s mobile app and not on the website itself. Following deliberation, the Court ruled that the existence of the consent language did not sufficiently undermine Plaintiff’s CEMA claim and, as such, the CEMA and CPA claims were allowed to proceed.
Why Does Jensen Matter to Your Business?
Our readership is well aware that sending unsolicited commercial text messages can create significant financial liability. The Court’s decision in Jensen is an important reminder that even text messages sent by a company’s customers can result in telemarketing law exposure. The lesson here is that businesses must employ best practices, including acquiring prior express written consent, even when third parties initiate telemarketing communications to consumers.
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