Texas Telemarketing Law Update: Certain Consent-Based SMS Exempt

Recent legal developments arising from a settlement with the State of Texas have resolved the regulatory ambiguity surrounding the application of Texas Senate Bill 140 ("SB 140") to electronic marketing programs.

The key takeaway is that businesses that send text messages only to consumers who have provided prior, affirmative consent are not considered "telemarketers" under Texas law.

What's Changing: Definitive Exemption for Consent-Based Marketing

The most significant change is the establishment of a confirmed legal status regarding the definition of a "telemarketer" under Chapter 302 of the Texas Business and Commerce Code. Previously, the expanded scope of SB 140 meant that virtually any marketing text message could be interpreted as a regulated "telephone solicitation," subjecting compliant opt-in programs to the same registration requirements intended for unsolicited communications.

The formal settlement affirms that:

Businesses sending text messages exclusively to consumers who have provided prior, affirmative consent are NOT classified as "telemarketers" under Texas law. Consequently, these legitimate, opt-in businesses are NOT subject to the registration requirements of Chapter 302.

This action validates the view that the law was intended to curb unsolicited commercial communications, not to impede requested, permission-based marketing. The full details of the legal resolution are documented in the EIA Settlement Announcement.

Mandated Official Guidance

The Texas Secretary of State ("SOS") has formally agreed to update its public-facing website guidance. This new directive will explicitly state that businesses engaging in consent-based text messaging are NOT required to complete the Telephone Solicitation Registration Statement (Form 3401).

This official action confirms the elimination of:

• The requirement to file the registration form.
• The obligation to post the mandated $10,000 security deposit.
• The continuing compliance burden associated with maintaining a registered status.

Required Action for Current Registrants

For businesses that filed a registration due to prior legal uncertainty, specific administrative steps must be taken to resolve the filing status:

• Pending Applications: If an application was filed but a registration certificate has not yet been issued, the application should be formally withdrawn (un-filed) to prevent unnecessary administrative processing.
• Approved Registrations: If a registration certificate was issued and approved, the business should formally close out the registration. The SOS will officially note the registration status as "closed" upon the cancellation of the security (the bond).

Information on the administrative process for un-filing or closing out existing registrations can be referenced in the EIA Settlement Announcement and will be detailed on the SOS website.

Next Steps for Compliance

This legal resolution marks a significant development, allowing compliant SMS programs to operate in Texas without prior regulatory hurdles. However, the risk of private litigation under the Texas Deceptive Trade Practices Act ("DTPA") remains, making it essential to maintain verifiable records of prior, affirmative consent for each recipient for future compliance and liability defense.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.