A significant amendment to the Texas Business and Commerce Code, known as Senate Bill 140 ("SB 140"), is taking effect on September 1, 2025. This new law significantly expands the definition of "telephone solicitation" to include text messages, image messages, and other electronic transmissions, in addition to traditional voice calls. This change has broad implications for any business that either communicates with Texas residents for marketing purposes or operates from Texas and sends marketing messages.
The key takeaway is that your business may now be required to register as a "telephone solicitor" with the Texas Secretary of State and post a $10,000 security deposit. Failure to comply could lead to a wave of litigation under the Texas Deceptive Trade Practices Act ("DTPA"), with potentially severe penalties.
What's Changing
Previously, the Texas Business and Commerce Code's telemarketing regulations applied only to voice telephone calls. With the amendments under SB 140, the law now explicitly covers:
- Text messages ("SMS")
- Multimedia messages ("MMS") with images or graphics
- Other electronic transmissions
This means that if you are sending marketing messages to Texas residents, or your business is located in Texas and you are sending marketing texts, your activities may now be subject to the law's registration requirements.
The Consequences
SB 140 empowers consumers to file lawsuits directly under the Texas DTPA for violations of the telemarketing law. This private right of action carries significant financial risks, including:
- Statutory damages: $500 to $10,000 per violation.
- Treble damages: For knowing or intentional misconduct.
- No cap on recovery: The law clarifies that a consumer who has recovered for a violation once can still sue and recover for subsequent violations.
- Attorney's fees and court costs: Plaintiffs may also recover legal fees.
This expansion of consumer rights and the ability to "stack" claims for multiple violations makes compliance crucial to avoid costly litigation.
The Exemptions
The law does provide for certain exemptions from the registration requirement. Some of the key exemptions include:
- Certain publicly traded companies and their subsidiaries.
- Certain financial institutions.
- Educational institutions.
- 501(c)(3) nonprofits.
- Businesses marketing the sale of food.
- Retail sellers with brick-and-mortar locations if the business has operated under the same name for the last two years and a majority of sales occur at retail locations.
- Businesses contacting their current or former customers if the business has operated under the same business name for the last two years.
How to Register
If your business does not qualify for an exemption, you will need to register with the Texas Secretary of State. The registration process requires specific information and includes:
- Filing a registration form.
- Paying a $200 application fee.
- Posting a $10,000 security deposit in the form of a bond, an irrevocable letter of credit, or certain certificates of deposit.
The registration is valid for one year and must be renewed annually.
What to Do Now
With the September 1, 2025, effective date fast approaching, we recommend that you:
- Review your marketing practices: Evaluate all of your communications to Texas residents, including SMS, MMS, and other electronic transmissions, to see if they fall under the new definition of "telephone solicitation."
- Assess your status: Determine if your business is required to register or if you qualify for an exemption.
- Take action: If you are required to register, begin the process immediately. The registration can take time to complete.
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.
