TCPA Lawsuits Are Up 44% in 2025: How to Protect Your Business from SMS Compliance Fines

Key Takeaways

Your business sent 50,000 promotional text messages last month. You thought you had consent. But one recipient claims they never opted in, and now you're facing a class action lawsuit seeking $75 million in damages.

Sound extreme? It's happening right now. TCPA (Telephone Consumer Protection Act) lawsuits jumped 44% in the first four months of 2025, with businesses across industries—from banks to e-commerce companies to healthcare providers—facing massive penalties for text message violations.

The worst part? Many businesses had no idea they were breaking the law.

This guide explains the TCPA litigation surge, the new legal landmines (including "quiet hours" claims), and exactly how to protect your SMS marketing from devastating fines in 2025.

The TCPA Litigation Explosion: By the Numbers

First Quarter 2025 Statistics

From January 1 to April 30, 2025:

• 880 TCPA lawsuits filed (up from 611 in the same period of 2024)
• 44% year-over-year increase
• 78% were class action lawsuits (not individual claims)

First quarter alone:

• 507 class action lawsuits filed—more than double the same period in 2024

Why the surge?

1. Supreme Court ruling eliminated legal certainty (more on this below)
2. New "quiet hours" legal theory gaining traction
3. Lucrative settlements encouraging plaintiff attorneys
4. Businesses unaware of new compliance requirements (10DLC, explicit consent rules)

What This Means for Your Business

TCPA lawsuits are not just "big company problems." Small and medium businesses are getting hit too:

• E-commerce stores sending abandoned cart texts
• Real estate agents following up with leads
• Healthcare offices sending appointment reminders
• Restaurants texting promotional offers
• Service businesses with reminder systems

One unsolicited text to one person can turn into a class action representing thousands of people—and millions of dollars in potential damages.

What Is the TCPA (And Why Does It Matter for SMS)?

TCPA Basics

The Telephone Consumer Protection Act (TCPA) is a 1991 federal law designed to protect consumers from unwanted telemarketing calls and text messages.

For SMS marketing, the TCPA requires:

1. Prior express written consent before sending promotional/marketing texts
2. Clear disclosure of what they're consenting to (message types, frequency)
3. Opt-out mechanism in every promotional message ("Reply STOP to opt-out")
4. Honor opt-outs within a reasonable time (10 days max, but do it instantly)

TCPA Penalties

Per-violation fines:

• $500 per unsolicited text message (statutory damages)
• $1,500 per willful or knowing violation (treble damages)

Example:

• You send 10,000 promotional texts without proper consent
• Each is a violation
• At $500 each = $5 million in potential damages
• If deemed willful = $15 million

Class action multiplier:

• If a law firm certifies a class of 50,000 people who received your texts
• Even one text per person at $500 = $25 million liability

Who Can Sue?

Anyone who receives an unsolicited text can sue.

And the worst part? Plaintiff attorneys actively seek out TCPA violations:

• They use tools that monitor mass text campaigns
• They create fake phone numbers and opt-ins to test your systems
• They target industries with common compliance gaps

The 2025 Game-Changer: Supreme Court's McLaughlin Decision

What Happened

On June 2025, the U.S. Supreme Court issued its decision in McLaughlin Chiropractic Associates v. McKesson Corp.

The ruling:
Courts are no longer required to defer to the FCC's (Federal Communications Commission) interpretation of the TCPA.

What this means in plain English:
Before: FCC issued guidelines on TCPA rules (like what counts as consent, when you can text, etc.), and courts mostly followed them.

Now: Courts can interpret TCPA however they want, ignoring FCC guidance.

Why This Created Chaos

Immediate result: Courts across the country started making conflicting rulings on the same TCPA questions.

Example: Do DNC (Do Not Call) Rules Apply to Text Messages?

July 21, 2025 - Two federal courts, same day, opposite rulings:

Oregon (Chet Wilson v. Skopos Financial, LLC):
Ruled that DNC protections DO apply to text messages.

• Businesses must check the National Do Not Call Registry before texting

Illinois (Jones v. Blackstone Medical Services):
Ruled that DNC protections DO NOT apply to texts.

• Only phone calls are covered by DNC rules

What this means for businesses:
Legal uncertainty. What's compliant in one circuit might be a violation in another.

The "Quiet Hours" Lawsuit Wave

The New Legal Theory

Over 100+ class action lawsuits were filed in March-April 2025 all making the same claim:

"Marketing texts can only be sent between 8:00 AM and 9:00 PM local time. Messages outside these hours violate TCPA's 'quiet hours' provision."

The Legal Argument

Plaintiff attorneys are citing 47 C.F.R. § 64.1200(c)(1), a TCPA regulation that states:

"No person or entity shall initiate any telephone solicitation to a residential telephone subscriber before the hour of 8 a.m. or after 9 p.m. (local time at the called party's location)."

Their argument:

• SMS is a form of "telephone solicitation"
• Therefore, texts sent before 8 AM or after 9 PM violate TCPA
• Each after-hours text = $500-$1,500 in damages

The Problem for Businesses

Many SMS campaigns send messages outside these hours:

• Automated drip sequences that trigger based on time zones you didn't account for
• Flash sales launching at midnight
• Early morning deals (e.g., "Get coffee on us! 7 AM only")
• Time zone mistakes (you're in EST, customer is in PST—your 10 PM is their 7 PM, but your 7 AM is their 4 AM)

Example case:
A retail company sent "Early Bird Special" texts at 7:30 AM Eastern to its entire list. Hundreds of West Coast customers received texts at 4:30 AM Pacific. Result: class action lawsuit seeking $10+ million.

Is the "Quiet Hours" Argument Valid?

The debate:

Plaintiff attorneys say: TCPA clearly states no calls before 8 AM or after 9 PM. Texts are calls.

Defense attorneys argue: The rule was written for phone calls, not texts. Texts are less intrusive (you can read them later). FCC hasn't specifically applied this to SMS.

Current status (as of late 2025):

• Courts are split
• Some judges are dismissing "quiet hours" claims
• Others are allowing them to proceed
• March 3, 2025: Ecommerce Innovation Alliance petitioned FCC to clarify that quiet hours don't apply to texts with prior consent (still pending)

What you should do:
Play it safe. Only send promotional texts between 8 AM - 9 PM recipient local time.

Recent TCPA Settlements: What Businesses Are Paying

2025 Major Settlements

Truist Bank - $4.1 Million (May 2025)

• Violation: Prerecorded calls without consent
• Lesson: Even calls (not just texts) fall under TCPA
• Key takeaway: Large companies with compliance teams still get hit

Clover Network LLC - $15 Million (2024)

• Violation: Sending texts without express written consent
• Context: Payment processing company texted businesses about services
• Key takeaway: B2B texts are NOT exempt from TCPA

Class Action Patterns

Typical settlement range: $3-20 million

Settlement structure:

• Plaintiffs receive $1,000-2,500 each (class members)
• Law firm takes 25-33% of total settlement
• Defendant pays legal fees on both sides

Example breakdown ($10M settlement):

• 10,000 class members × $500 each = $5M to victims
• Plaintiff attorney fees (30%) = $3M
• Defendant's legal fees = $2M+
• Total cost to business: $10M+ settlement + years of litigation

The 5 Biggest TCPA Mistakes Businesses Make

Mistake #1: No Written Consent (or Vague Consent)

The violation:

• Assuming verbal "yeah, text me" is enough
• Using pre-checked opt-in boxes
• Buying phone lists and texting them

The law requires:
Prior express written consent that clearly states:

• You're agreeing to receive SMS messages
• From [specific business name]
• About [types of messages: promotional, transactional, alerts]
• Message frequency (or "frequency may vary")
• Message & data rates may apply
• How to opt-out ("Reply STOP")

Compliant consent example:

[ ] I agree to receive promotional text messages from
    [Business Name] at the phone number provided.
    Message frequency varies. Message and data rates
    may apply. Reply STOP to opt out at any time.

Non-compliant:

[✓] I agree to the Terms of Service
    (checkbox pre-checked, no specific SMS mention)

Mistake #2: Texting After Someone Opts Out

The violation:

• Continuing to text after someone replies STOP
• Not honoring opt-outs within 10 days
• Re-adding opted-out contacts to new campaigns

TCPA requirement:
Opt-outs must be honored "within a reasonable time" (courts interpret this as immediately, no more than 10 days).

Best practice: Instantly suppress opted-out numbers from ALL campaigns (not just the specific one they opted out from).

Example case:
Customer replies STOP to a retail brand's promotional texts. Brand stops promotional texts but continues sending "transactional" order updates with promotional upsells at the bottom. Customer sues. Court rules: Once they opt out, you can't text them marketing content period (even disguised as transactional).

Mistake #3: Texting Without 10DLC Registration

The violation:

• Sending A2P (Application-to-Person) texts from unregistered phone numbers
• Not completing brand and campaign registration with The Campaign Registry

Why this matters for TCPA:
While 10DLC registration is a carrier/deliverability requirement, failing to register suggests you're not following proper business texting protocols—which plaintiff attorneys use as evidence of willful TCPA violations.

Additionally:

• Unregistered messaging often gets filtered (sign your messages aren't reaching people)
• Carriers penalize unregistered traffic (higher per-message costs)
• Shows lack of compliance awareness (bad in court)

Mistake #4: Not Tracking Consent Records

The violation:

• No documentation of when/how people opted in
• Can't prove consent when sued

TCPA burden of proof:
When someone sues claiming they never consented, you must prove they did. If you can't, you lose.

What to document:

• Timestamp of opt-in
• Source (website form, keyword text-in, paper form, etc.)
• Opt-in language they saw and agreed to
• Phone number they provided
• IP address (for web forms)

Best practice: Your SMS platform should automatically log all opt-ins with full audit trail.

Mistake #5: Assuming "Existing Business Relationship" Exemption Applies

The myth:
"We can text customers who've bought from us before—that's an existing business relationship!"

The reality:
TCPA does NOT recognize an automatic existing business relationship exemption for SMS marketing.

Even if someone:

• Bought from you yesterday
• Provided their phone number during checkout
• Signed up for an account

You CANNOT text them marketing messages unless they explicitly consented to receive SMS.

The narrow exception:
You CAN send purely transactional texts (order confirmations, shipping updates, appointment reminders) without explicit SMS opt-in IF:

• They provided their number for that specific transaction
• The message is purely informational (no promotional content)
• You still honor STOP requests

TCPA Compliance Checklist for SMS Marketing (2025 Edition)

✅ Before Sending Any Texts

Consent Management:

• Obtain prior express written consent before sending promotional texts
• Use clear, specific consent language (not buried in Terms of Service)
• Never use pre-checked opt-in boxes
• State message frequency or "frequency may vary"
• Include opt-out instructions in consent form

Documentation:

• Store consent records with timestamp and source
• Maintain audit trail of all opt-ins
• Keep records for at least 4 years (statute of limitations)

10DLC Compliance:

• Register your business with The Campaign Registry
• Register all SMS campaigns (use cases)
• Link phone numbers to approved campaigns

✅ Every Message You Send

Content Requirements:

• Include your business name in initial messages
• Add "Reply STOP to opt-out" to promotional messages
• Don't hide opt-out instructions in links or fine print

Timing:

• Only send between 8 AM - 9 PM recipient local time
• Account for all U.S. time zones if sending to national lists
• Pause campaigns on major holidays (optional but recommended)

Opt-Out Handling:

• Process STOP requests immediately (within seconds if possible)
• Suppress from ALL campaigns, not just the current one
• Send confirmation: "You've been unsubscribed. Reply START to opt back in."

✅ Ongoing Compliance

List Hygiene:

• Never text purchased or scraped phone lists
• Re-confirm consent annually for inactive subscribers
• Remove numbers that hard-bounce or repeatedly fail

Monitoring:

• Review complaint rates (aim for <0.1%)
• Track opt-out rates (>2% indicates a problem)
• Monitor for spam reports

Team Training:

• Train all team members on TCPA rules
• Document training sessions
• Update training when rules change

What to Do If You Get a TCPA Demand Letter or Lawsuit

Step 1: Don't Panic (But Act Fast)

Timeline matters:

• Demand letters typically give 30-60 days to respond
• Lawsuits have strict response deadlines (often 21 days)

Do NOT:

• Ignore it (default judgment = automatic loss)
• Admit fault in writing
• Delete records (considered evidence spoliation)

DO:

• Contact a TCPA defense attorney immediately
• Preserve all records (opt-ins, message logs, consent forms)
• Stop texting the plaintiff immediately

Step 2: Gather Your Defense Evidence

What your attorney will need:

• Consent records for the plaintiff (and class if applicable)
• Proof of opt-in (timestamp, source, language)
• Message logs (what you sent, when)
• Opt-out records (did they opt out? When? Did you honor it?)
• Your SMS terms of service
• Your 10DLC registration details

Step 3: Evaluate Settlement vs. Fighting

Consider settling if:

• You clearly violated TCPA (no consent, ignored opt-out, etc.)
• Class is large (fighting could cost more than settling)
• Records are messy or missing
• You want to avoid public trial

Consider fighting if:

• You have solid consent records
• Plaintiff's claims are technically wrong
• Settlement demand is unreasonable
• You need to set precedent for your industry

Typical early settlement range:

• Individual claims: $5,000-$50,000
• Small class actions: $100,000-$1M
• Large class actions: $3M-$20M+

Step 4: Implement Fixes to Prevent Future Lawsuits

Even if you settle, fix your compliance gaps:

• Audit all SMS campaigns for consent issues
• Implement proper opt-in forms
• Add compliance checks to your texting workflow
• Consider switching to a platform with built-in TCPA safeguards

How to Build a TCPA-Proof SMS Marketing System

Layer 1: Bulletproof Consent Collection

Web forms:

• Unchecked opt-in box (user must actively check it)
• Clear consent language above the box
• Separate from other checkboxes (don't bundle with newsletter)

Keyword opt-ins:

• Customer texts "JOIN" to your number
• Auto-reply confirms: "You've subscribed to [Business] texts. Frequency: 2-4/month. Reply STOP to end."

Paper forms:

• Physical signature
• Date stamp
• Retain digitized copies

Layer 2: Automated Compliance Controls

Use an SMS platform with:

• Automatic STOP handling (instant suppression)
• Time zone detection (prevents quiet hours violations)
• Consent timestamp logging
• 10DLC registration management

DMText example:

• Built-in TCPA compliance features
• Automatic opt-out processing
• Message scheduling with time zone awareness
• Audit trail for every opt-in and message

Layer 3: List Management Best Practices

Do:

• Segment by consent source (web, keyword, paper)
• Tag with consent date and campaign type
• Regularly clean bounced/invalid numbers
• Re-confirm consent annually for cold subscribers

Don't:

• Mix lists from different sources
• Text old lists without re-confirming consent
• Add people manually without documentation

Layer 4: Message Content Safeguards

Every promotional message must include:

1. Business name (in initial message)
2. Opt-out instructions: "Reply STOP to opt-out"
3. Help keyword: "Reply HELP for help"

Example compliant message:

Hi Sarah! Spring Sale at [Business Name]: 40% off all
items this weekend! Shop now: [link]

Reply STOP to opt-out | HELP for help

Layer 5: Team Training & Accountability

Create a compliance checklist for everyone who sends texts:

• Verify recipient is opted in
• Check time zone (8 AM - 9 PM local time)
• Include opt-out instructions
• Log message in CRM

Monthly compliance review:

• Opt-out rate (should be <2%)
• Complaint rate (target <0.1%)
• Consent documentation audit (random sample)

The Future: What's Coming in 2026

Potential Regulatory Changes

1. FCC May Clarify "Quiet Hours" for SMS

• Expected ruling: Prior consent exempts you from quiet hours restrictions
• But until officially ruled, play it safe

2. Stricter Consent Requirements

• One-to-one consent (consent for Brand A doesn't apply to Brand B, even if same parent company)
• Annual consent reconfirmation requirements

3. Increased Penalties

• Legislative proposals to raise TCPA fines to $5,000 per violation
• Automatic treble damages for willful violations

Industry-Specific Crackdowns

High-risk industries currently being targeted:

• Lead generation companies
• Debt collectors
• Health insurance marketers
• Solar/home improvement companies
• E-commerce/retail

Why? These industries have historically had high violation rates and deep pockets for settlements.

Conclusion: Compliance Is Cheaper Than Lawsuits

The math is simple:

Cost of TCPA compliance:

• Proper SMS platform with safeguards: $200-500/month
• 10DLC registration: $50-100 one-time
• Compliance audit/training: $1,000-5,000 annually
• Total: ~$10,000/year

Cost of one TCPA lawsuit:

• Legal fees: $50,000-$500,000+
• Settlement: $100,000-$20,000,000
• Reputational damage: Priceless
• Total: Potentially company-ending

The 2025 reality:
With TCPA lawsuits up 44%, courts creating conflicting rules, and "quiet hours" claims proliferating, ignorance is not a defense.

Three action items to implement this week:

1. Audit your consent records - Can you prove every person on your SMS list opted in?
2. Implement time restrictions - Only send texts 8 AM - 9 PM recipient local time
3. Switch to a compliant platform - Use a system with built-in TCPA safeguards

Ready to build a TCPA-proof SMS marketing system? DMText provides built-in compliance features including automatic opt-out processing, time-zone-aware scheduling, consent logging, and 10DLC registration support. Our platform is designed to keep you compliant while maximizing deliverability—so you can focus on results, not lawsuits. Start your free trial today and send messages with confidence.

Sources

1. CompliancePoint. "TCPA Lawsuits on the Rise in 2025"
2. Privacy World. "New Class Action Threat: TCPA Quiet Hours and Marketing Messages 2025"
3. Financial Services Perspectives. "A New Era for TCPA Litigation: Conflicting Rulings on Text Messages"
4. National Law Review. "TCPA Landscape 2025: Key Developments and Compliance Priorities"
5. TCPAWorld. "The World of the Telephone Consumer Protection Act" (ongoing case tracking)
6. LeadsHook. "35 Biggest TCPA Lawsuits Ever (2025)"

Related Resources:

• SMS Compliance Checklist 2025: Complete TCPA Guide
• 10DLC Registration Mistakes: 7 Reasons Your Application Got Rejected
• SMS Marketing Best Practices: 15 Proven Strategies

Last Updated: January 5, 2025