Square Inc. now faces a class action lawsuit claiming the mobile payments company sends unauthorized texts to consumers as part of its SquareUp loyalty program.
According to a lawsuit filed Monday in U.S. District Court for the Northern District of California, the company uses cellphone numbers that customers enter into Square card readers in order to receive digital receipts to later send unsolicited texts for loyalty programs from separate vendors.
The lawsuit, filed by lawyers at Kazerouni Law Group, claims that Square violates the Telephone Consumer Protection Act by sending text messages to consumers who didn’t opt into the SquareUp program and only provided their number to obtain a receipt via text message. The suit also claims Square violated the TCPA in cases where consumers opted into the program but were not made aware that they would receive loyalty texts from businesses other than the ones whose program they intended to opt into.
The complaint says that consumers “received woefully insufficient disclosure before providing their phone number and therefore could not have provided meaningful consent to receive loyalty texts sent by Square on behalf of its SquareUp loyalty clients.”
A Square spokesperson said the company hadn’t yet been served with the complaint Tuesday and was just beginning to review the allegations. “Based on our initial review, we believe plaintiffs are confused as to how our receipts, loyalty, and text marketing products work,” the spokesperson said. “We believe the claims are without merit.”
Abbas Kazerounian of the Kazerouni Law Group was out of the office and unavailable for comment.
The complaint points out that plaintiffs do not challenge Square’s practice of sending receipts via text message, but instead targets the association of consumer payment card information with their mobile phone numbers to create consumer profiles Square uses in the loyalty program—a program which is marketed to vendors as a way to attract and retain customers.
“What Square fails to mention in its marketing of the Loyalty Program is that customers who do ‘enroll’ do not provide consent to receive those automated text messages from any business. And worse, even customers who do not ‘enroll’ still receive automated text messages from Square,” the complaint says.
The suit seeks to certify a nationwide class of any consumer who over the past four years has received a loyalty text message from Square via an automatic telephone dialing system. The suit seeks damages under the TCPA of as much as $500 per text message, or treble damages of $1,500 per text message for violations found to be willful.
By Ross Todd | February 04, 2020