Is AT&T’s Partnership With HoroscopeGenie Legal?

Recently, The New York Times ran a Q&A about the unscrupulous practice of “cramming.” In short, the reader detailed how two online content creators,

Recently, The New York Times ran a Q&A about the unscrupulous practice of “cramming.” In short, the reader detailed how two online content creators, Gosspi and HoroscopeGenie, got AT&T to charge users for their apps without expressed confirmation or consent. How? With some very tricky marketing copy through a text message that read: “HoroscopeGenie Alert: 3 horoscopes/wk for $9.99/mo Reply HELP for help, STOP to cancel. Msg&data rates may apply.”We checked with Attorney Lisa Dubrow about this practice, and she unequivocally said that it’s illegal. “Without affirmatively agreeing to a service you cannot be legitimately charged,” she wrote in an email. “That does not stop unscrupulous marketers who rely on consumers not noticing small amounts charged on their phone or credit/debit card statements.”AT&T refunded the complaining consumer’s charge, but then remained curiously silent when the NY Times called for a comment. That’s probably because affiliate relationships are a great revenue-generator for telecommunications companies, and AT&T let dollars trump good business practices.The takeaway for online subscription sites, particularly those selling subscriptions to mobile apps? You’ll want your marketing copy to be catchy (and brief given the limited space in text messages), but double- and triple-check to make sure you’re obeying the law and forcing customers to consent to your service instead of defaulting them into it. Even if your affiliate agreement with a telecommunications company lets you pass on these requirements, the government won’t.

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