Texas Bill to Strengthen Private Right of Action

On June 1^st, the Texas House of Representatives signed and sent Senate Bill 140 to Governor Abbott for his signature. The goal of this bill is to protect consumers from deceptive or misleading practices in the telephone solicitation business, but this bill could impact those making telemarketing calls to Texas residents, even when the callers are trying to do the right thing.

The Texas legislature is looking to re-define telephone solicitation as the following:

“Telephone solicitation” means a telephone call or other transmission, including a transmission of a text or graphic message or of an image, initiated by a seller or salesperson initiates to induce a person to purchase, rent, claim, or receive an item.”  

Note that this definition includes inbound calls from customers in response to a solicitation made by any means. Texas law will now cover a broader range of solicitous outreach, including text messages, graphic messages, images, and even responses to mailed promotions. This change puts nearly every form of marketing communication under closer legal scrutiny.

Expanded Private Right of Action

The Texas legislature has proposed a more expansive private right of action, allowing individuals to sue not only for telemarketing violations but also any deceptive trade practice as defined by the Texas Deceptive Trade Practices Act (DTPA). Telemarketing violations in Texas will now be treated as false, misleading, and deceptive acts. With the private right of action, civilians will be entitled to:

• Injunctive Relief: The court can order the violator to cease their illegal practices immediately.
• Damages: Consumers can recover actual or statutory damages from $500 to $10,000 per violation. The maximum penalty was increased from $5,000 to $10,000 to further encourage compliance with Texas’ telemarketing rules.
• Attorney’s Fees and Court Costs: Plaintiffs can recover their legal fees. This will make it easier for individuals to pursue claims without the financial burden.

Potential issues could include state disclosure requirements, expired established business relationships (EBR) (TX only allows a 12-month EBR for past transactions), calling wireless numbers (regardless of dial method) without express consent, lack of telemarketer registration, etc. Perpetuating the potential risk to businesses, SB 140 also states that there are no limits on repeated claims, meaning a consumer who sues under the provisions of the bill can bring unlimited future lawsuits without restriction. If your business engages in any kind of solicitous outreach, SB 140 will affect you.

If passed and approved by the Governor, this act is set to take effect on September 1, 2025. Texas continues the trend of states imposing more restrictive telemarketing rules to deter misleading marketing practices. Staying up to date on developments in federal and state regulations can be a complex and time-consuming task. CompliancePoint has a team of marketing compliance professionals that can take compliance monitoring off your plate. Reach out to us at connect@compliancepoint.com to learn more about our services.