updated - May 19, 2013 Sunday EDT
Heartland Automotive Services have reached a proposed settlement with consumers in response to the alleged test message spam they blasted out to mobile devices last year.
Heartland Automotive Services is the largest Jiffy Lube franchisee in America. Heartland has agreed to pay $47 million to settle a class-action lawsuit accusing it of spamming millions of consumers with text ads for discounts.
If approved by U.S. District Court Judge Jeffrey Miller in the Southern District of California, the deal would resolve allegations that the company's text ad campaign violated the Telephone Consumer Protection Act. That law requires companies to obtain users' express consent before sending them text ads. Companies that fail to do so are liable for $500 per violation.
That law requires companies to obtain users' express consent before sending them text ads. Companies that fail to do so are liable for $500 per violation.
Derek Johnson, CEO of Tatango, says the proposed settlement of $47 million is "to my knowledge the largest in the history of text message spam lawsuits."
The proposed settlement calls for Heartland to offer consumers discounts of around $17 for any Jiffy Lube service. The deal also requires Heartland and TextMarks to agree to an injunction banning them from sending text ads unless recipients consent in writing.
The consumers' lawyers argue in court papers filed this month that the eight-figure deal should be approved -- although it calls for Heartland to pay less than $500 per consumer. "TextMarks was financially unable to contribute to any meaningful settlement relief and Heartland's financial condition was such that the creation of a cash settlement fund sufficient to mail each person a check approaching the $500 statutory damage amount was impossible," the lawyers say.
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