Papa John's pizza chain accused of SMS cheesiness, faces $250M class action

Filed Under: Featured, Law & order, Spam

US pizza chain Papa John's is in the firing line of a Seattle, Washington, law firm.

Heyrich Kalish McGuigan, PLLC specialises in litigation against SMS spammers, robocallers and telemarketers.

And the lawsuit they're bringing against Papa John's certainly sounds dramatic. The lawyers say:

"[This] could be one of the largest damages awards ever recovered under the federal Telephone Consumer Protection Act. The class action lawsuit contends that 500,000 illegal text messages were sent to Papa John’s customers across the country. Papa John’s customers could be awarded $500 or more in statutory damages for each text message."

An issue seems to be the issue of consent to receive SMS messages. According to court documents:

"OnTime4U [a co-defendant that sent out 'special offer' SMSes on behalf of Papa John's franchise holders] apparently told Papa John's franchisees that it was legal to send texts without express customer consent because there was an existing business relationship between the customers and the Papa John's restaurants."

But the litigators argue that:

"Complaints from ... customers state that they ... received text message advertisements without having given their prior consent to Papa John's or one of the franchisees."

Tricky stuff.

The court has affirmed that the class action can go ahead on behalf of complainants from all over the USA. Even if you received only a single SMS, you're eligible to join in.

Each SMS you received could, if the class action lawyers are to be believed, represent $500 in cash - enough at current prices to order in 1250 Papa's Chicken Poppers, 658 Spicy Buffalo Wings, or a gutbusting 23.5 metres of Cheesestick (20.3 metres of the six-cheese variety).

While you're chomping on your Cheesesticks (which are delivered in handy lengths of approximately 300mm, by the way), here's an interesting irony on the issue of inferred consent for electronic communications.

Heyrich Kalish McGuigan's own privacy policy in respect of email advises that:

Unless you ask us not to, we may contact you via email in the future to tell you about specials, new products or services, or changes to this privacy policy.

What do you think?

Should emails and SMSes to existing customers or contacts be treated differently? In a world of mobile devices on which telephony and internet access are just two sides of the same coin, does this make sense?

Is it OK to have an opt-out policy for your own email-based marketing but to expect others to abide by a strict opt-in policy for SMS-based offers?

Let us know by leaving a comment below...

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29 Responses to Papa John's pizza chain accused of SMS cheesiness, faces $250M class action

  1. kkw · 1057 days ago

    I have received unsolicited text messages like those above. Totally ticked me off. At least I have unlimited texts. Why should we have to opt out? They should have people "opt in" instead.

    • Paul Ducklin · 1057 days ago

      It sounds as though you are dead against "inferred consent" for SMS messaging (not least because receiving SMSes might incur a per message charge). Just because you've bought from me in the past doesn't mean I can send you marketing messages in the future.

      How about "inferred consent" for email, which seems to be what the lawyers are doing here? Once you engage with me online I can email you marketing messages until you say, "Stop."

      Is that OK? I can see why it might be...but why not just adopt the same strictness for email as for SMSes?

      • Elaine · 1057 days ago

        For one thing I have never seen a plan where you have to pay for each e-mail you send or recieve. Not everyone has unlimited text and have to pay for each one or for everyone that is over their limited number. I do not want some ad thank away a text that I might want to send or recieve from someone I want to hear from. So unless every phone plan gives you unlimited texting yes they should be treated differntly.

  2. A. Greyfox · 1057 days ago

    To my way of thinking, all broadcast messaging, like spamming SMS or email, should be opt-in only.

    That Heyrich Kalish McGuigan has an opt-out policy while Papa John's apparently has no policy to option in or out, is an interesting comparison, yet does not garner any slack for Papa John's SMS spamming customers and refusing to stop SMS spamming customers.

    Besides, unlike email, many people pay a per-message charge in some form, for every SMS they receive.

    • Paul Ducklin · 1057 days ago

      Good point - the fact that some complainants claim to have continued receiving SMSes even after opting out is an additional grievance here.

  3. Julian · 1057 days ago

    UK customers like myself have also been affected by this. The difference between Email and SMS is that Email I can opt-out for free, this one cost me a premium rate SMS to opt-out!

    • Paul Ducklin · 1057 days ago

      Is that allowed? Do UK regulations permit charging at premium rates to send unsubscribe messages? (I'm assuming that the messages you wanted to opt out of were being lawfully sent to you either because you'd explicitly opted in or because of some sort of inferred consent.)

      • Julian · 1057 days ago

        So basically I entered my mobile number when placing an order (back in September) and specifically unchecked the email/phone marketing opt-ins (as far as I can remember), and yet still received a weekly advertising text message. After getting annoyed with this I sent the STOP opt-out text to the number quoted, to later see on my phone bill:

        Premium text - 1 - £0.10

        I wasn't best pleased, but I'm not well versed in UK law (nor what counts as 'inferred consent' so just left it.

      • Marcus King · 1057 days ago

        No UK regulations do not allow this, you should contact the PPP who are the regulators and they can get them closed off.

  4. D.Lee · 1057 days ago

    alot of people are still on plans that only allow them a specific number of messages a month. Because of that one fact alone the company should be requiered to get permission as most companys do now

  5. jag · 1057 days ago

    As long as I pay for my phone service, I do not authorize spam from anybody or any business. If the spammer will pay my cell bill every month, I will accept their spam.

    • Paul Ducklin · 1057 days ago

      Help me here folks - and I think I am about to reveal some astonishing ignorance - but are you chaps saying that in the USA it is the rule, rather than the exception, to pay a per-message fee to *receive* an SMS, even when no roaming is involved?

      (If so, what sort of fee are we talking about? 1c? 10c? Also, is this instead of or as well as the SMS sender paying?)

      • Yum-Pizza · 1057 days ago

        Yes, a lot of cell phone carriers in the USA will charge per text message - regardless if it is sent or received. I believe the average cost is between 5 and 10 cents per message. (Up until 18 months ago, when I added a texting plan, it cost me 5 cents per text message.)

        • Paul Ducklin · 1057 days ago

          Do you pay to receive calls (when not roaming) too, or is this just an SMS anomaly?

          Is it mandatory for mobile providers to allow you to block SMSes altogether and thus to avoid these charges?

          As a later commenter (@Ornella Trojani) points out, it seems strange indeed that it's lawful to charge you for messages someone else chooses to send and that you can't control. A bit like charging you for calls to your phone even if you don't answer them...

      • Hawke · 1057 days ago

        Under one mobile plan I have had recently, each incoming or outgoing SMS was charged at 40c a piece. Some limited SMS plans start charging that rate after you cap at a given number in the 100s.

        A sender ont he same type of plan will be charged by their carrir as well.

        Roaming can be even more expensive.

      • Chris · 1057 days ago

        Yes, indeed, both senders and recipients pay in the U.S. I pay 20 cents for each text. My only alternative through lovely AT&T is to pay $30 a month for unlimited for the family, and we can't justify that, since intrafamily texts can be sent for free through iCloud.

      • Laurence Marks · 1057 days ago

        I pay AT&T $4.99 per month for 200 messages which can be SMS or MMS. All messages, incoming and outgoing, beyond that are charged at $0.20 each.

        (I always have thought this was peculiar, since one MMS can be larger than 199 SMS messages.)

  6. The day that SMS (per message) is charged as email (usually free), I may change my opinion.

    The way things are now, I regard my SMS as personal and direct. While my email does come to my phone, it is a completely different method of communication and I often ignore or turn off my email notification while leaving the SMS notification enabled. I'm expecting my SMS message to be someone I know - not spam, and I'd really like to keep it that way as long as I can.

    Email has become the home for spam, and Gmail has designed a very effective method of capturing that spam - I do not have that feature within my SMS system. Even if I did, it would still "charge" me a message to receive it.

  7. Jim · 1057 days ago

    Same people who don't want to pay $.25 per pizza for Health care.

  8. Albert · 1057 days ago

    I believe that all types of advertisements should be opt-in. Furthermore, I believe any unsolicited messages shouldn't be allowed. If we don't stop this now it wont take too long before we definitely have no privacy.

    Currently we can be tracked through mobile devices and cars with built-in GPS services used as a security feature to find the car if stolen. Anyone who uses a portable device that uses Internet services can be found at any moment with tools that are available for free on the Internet. Cellular carriers have services to allow you to track other members of included in you account.

  9. Jack · 1057 days ago

    Maybe I'm different. I have texting 'turned off' for anyone texting me otherwise it costs me 10 cents each or another 50 cents for a photo included in the text. I live without texting because they charge an arm and leg for a virtual non existent data transfer. All people in the US are abused by the telecoms by paying such an incredible cost for texting. It was created to be a small message to fit into a packet so it's one packet paying a dime for??? What a rip off. I haven't figured it out, but I've heard that it's upwards of 1500 bucks a gig for this type of data use. As far as I'm concerned how I use my data is my own business not of any concern for the telecoms. Data should not be separated, especially when virtually all communications are via data, not actually voice. Everybody quit using texting for a couple of months and the telecoms will capitulate.

    As far as anyone saying, I'm a customer I authorize texting! How to shaft a customer! I would never approve of that. Add me to the list!

  10. AlphaCentauri · 1057 days ago

    IANAL, but because of the per-message costs in the US for incoming SMS (called "text messaging" here), I believe there specifically are laws prohibiting this and the $500/message fine is probably part of the law. That's the cost for unsolicited faxes, too, though a pre-existing business relationship does permit opt-out-only fax policies.

    Our carrier charges ten cents if we go over our allowance. That may not sound like much. But if "legitimate" companies like Papa Johns -- by which I mean, companies with known addresses which can be served with lawsuits -- start sending SMS spam with impunity, we'll be absolutely inundated with it. People will have to stop using text messaging. There's no way to filter it, especially when it's easy to spoof the source.

    @Jim -- yeah, the sense of entitlement and hypocrisy for one company to hold both positions is unbelievable.

    • AlphaCentauri · 1057 days ago

      Oh, and the sender may avoid SMS charges by using an internet carrier. Only the recipient pays.

  11. Ornella Trojani · 1057 days ago

    I'm amazed! Do you really have to pay for something you can't prevent and so can't be held responsible for? Here (Italy) only the sender pays about 10/12 eurocents, roughly 8/10 cents.

  12. Freida Gray · 1057 days ago

    I use a basically disposable cell phone account.For a little under 50 dollars every 30 days I can get unlimited service as far as talk,text,& internet/data.Still,whether or not I am a customer of a company,I would prefer not to receive special offers from that company unless I chose to get them.
    Cell phone companies such as Cingular,Sprint,T_Mobile,etc. each charge their customers for texts,& SMS.The amount for each text or SMS sent varies from carrier to carrier.For unlimited text & or SMS customers have to pay a lot more than 50 dollars a month.

  13. JRD · 1056 days ago

    I'm in the US and luckily I have a plan with unlimited talk and texting for my mobile.
    It varies from carrier to carrier and from plan to plan. I was shocked when I got my new phone a month ago and the unlimited talk and text was included in the base package. I was so shocked, I called their support people before ordering it just to make sure.

    However, I am under the impression that a customer's only recourse for unsolicited SMS messages it to call the carrier and complain until they credit you back the cost for that particular text message.

    What Papa John's is doing is not fair and I believe relying on implied consent is quite shady when the "customer" may be forced to pay for your SPAM.

    I work for a bank and there are all sorts of very specific occasions when we can and cannot use implied consent and when there is opt out and when there is opt in. It's all codified in laws and regulations for us and makes things quite easy to keep straight. There is no gray area for us to make costly mistakes into.

    I'd hate to see everyone subject to the same heavy regulations, but if they keep making $500 million errors, it may be in their best interest to build up some self-regulations.

  14. joe · 1056 days ago

    It should be unlawful for anyone to send superfluous or recurring messages like ads that the customer has to pay for without that customer's permission. The first cell phone I ever owned was a criKet. I was stunned when the first txt msg I received was from criKet welcoming me - for which I had to pay them $1!

    Imagine in the physical world, that you took your car to a car-wash. A week later you get a letter saying, "Unless you call to cancel, we are going to wash your car every day and you will be billed $30 for each wash." This is illegal. Why should the virtual world be different?

  15. Guest · 1055 days ago

    Papa John's action was wrong. But the lawyers are scum just the, wait -- they're worse, because they're pretending to stand for what's right, when in actuality they're just milking the system. In cases like this, the lawyers are always the winners. Scum.

  16. roy jones jr · 1053 days ago

    Cingular doesn't exist. Its AT&T now, hehe. Anyway, the texting and roaming setup for US is ridiculous. Didn't some lady accidentally leave her phone on roaming and had to pay $100,000 plus? I mean when the phone company saw that did they REALLY believe that account all of sudden needed to roam for that long? Never underestimate the power of greed.

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About the author

Paul Ducklin is a passionate security proselytiser. (That's like an evangelist, but more so!) He lives and breathes computer security, and would be happy for you to do so, too. Paul won the inaugural AusCERT Director's Award for Individual Excellence in Computer Security in 2009. Follow him on Twitter: @duckblog