Keller Rohrback Investigates Telemarketing-Loyalty Texts from Square, Inc. 

 

Keller Rohrback Complex Litigation

Receive any strange text messages recently? Were any of these strange text messages from retailers who use Square, Inc. kiosks or chip-readers?

Were any of these strange text messages for “loyalty” programs, telling you, “Welcome to our Loyalty Program!” or “You just earned X loyalty points!”

Are you pretty sure you didn’t give the retailer your phone number? If so, it’s possible you’ve been receiving text messages that may violate state and/or federal law.

Very few people pay in cash anymore, and retailers have adjusted, accepting most major credit and debit cards, as well as alternative forms of electronic payment. Many retailers—especially retailers that make money off repeat business—have turned to Square to handle their credit card transactions.

In order to distinguish itself from its competitors, Square provides many benefits and features to its client-retailers. One benefit Square emphasizes is its ability to help client-retailers use customer information and data to drive repeat business with marketing features, such as Square’s “loyalty” program. Square’s loyalty program allows client-retailers to send customers “loyalty” texts whenever they spend a certain amount of money at the retailer, offering rewards to incentivize repeat business. Square’s efforts at distinguishing itself have paid off, with Square processing of $49 billion in gross payment volume in 2016 alone.

Here’s how Square’s loyalty-text program works:

Step 1: You make a purchase at a retailer who uses Square’s system, pay with your credit card, and request a receipt via text message, which Square sends you shortly thereafter.

Step 2: Square stores your credit card information and phone number in its database.

Step 3: You make another purchase at a different Square client-retailer, using the same credit card, without necessarily asking for a receipt.

Step 4: If that client-retailer has turned on Square’s loyalty program, you automatically receive a text message telling you that you’ve earned X number of loyalty points in that retailer’s loyalty program.

What makes this practice possibly a violation of the law is that when you ask for a receipt at Step 1, you are not consenting to receive telemarketing or advertising—which is what loyalty texts are—from a different retailer and/or Square at Step Four. Each and every text you receive from one of Square’s client-retailers for their loyalty programs is a violation of federal law, each instance of which carries a $500 or $1500 fine depending on how much Square really knows about its practices.

If you, or someone you know, has received loyalty texts from Square and/or Square’s client retailers, please contact Mark Griffin, Karin Swope, or Max Goins to learn more about whether you too have received telemarketing texts from Square. Call 800.776.6044 or email .

Keller Rohrback L.L.P. serves as lead and co-lead counsel in class action lawsuits throughout the country, including actions asserting consumer protection claims for unfair and/or deceptive telemarketing practices. With offices in New York, Seattle, Phoenix, Ronan, Oakland, and Santa Barbara, our Complex Litigation Group is proud to offer its expertise to clients nationwide. Our trial lawyers have obtained judgments and settlements on behalf of clients in excess of eighteen billion dollars.

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