Two recent class action lawsuits have brought to light an unexpected potential threat inherent in “virtual concierge” systems.
Many hotels and resorts have found these platforms to be a cost-effective way to deepen engagement with guests. Virtual concierge systems allow users to ask common questions like “How late is room service offered?” via text message. Ideally, the guest gets an answer quickly and the hotel provides better service without increasing labor costs.
Joel Tasca is a partner in the Las Vegas office of Ballard Spahr LLP.
While virtual concierge systems hold significant promise for hotels and guests, the threat of litigation may change how the industry feels about them.
The two lawsuits have both alleged violation of the U.S. Telephone Consumer Protection Act (TCPA). The statute forbids the making of any call using any “automatic telephone dialing system” (ATDS), or an artificial or prerecorded voice, without “prior express consent” of the receiving party.
The TCPA applies to text messages as well as calls, and it provides for per-call or per-text damages of US$500 (for a negligent violation) to US$1,500 (for a willful violation). There is no cap on damages.
The TCPA began as a well-meaning consumer protection statute to cut down on irritating “robo-calls,” but consumer-plaintiffs’ lawyers nationwide are starting to exploit it by going after businesses making legitimate calls and sending legitimate text messages.
With respect to virtual concierge systems, a primary issue that hotels need to consider is whether the system could be seen as an ATDS. If it can, it may implicate the TCPA. Under the TCPA, an ATDS is defined as “equipment which has the capacity to store or produce numbers to be called, using a random or sequential number generator; and to dial such numbers.” For quite some time now, the legal system has wrestled with the definition of an ATDS.
That state of confusion notwithstanding, resorts and hotels can make strides in shielding themselves from TCPA liability if they consider three strategies:
Obtain the highest level of consent at the outset.
A critical issue in TCPA liability for virtual concierge systems is whether the hotel has collected the “prior express consent” of the recipient before issuing the text. Prior express consent has been another topic of numerous judicial and regulatory opinions. The type of consent required depends on whether the text is for advertising or promotional purposes, or instead is just for informational purposes. If a text is considered one for advertising or promotional purposes, then a higher level of consent – “prior express written consent,” including specific language and disclosures, and requiring the guest’s signature – must be obtained before the text can be lawfully issued.
Therefore, the precise language of the text message sent by the system becomes critical. For example, could a text that seems purely informational be construed as an implicit promotion for additional hotel services? One solution might be to obtain the highest level of consent from the guest upfront, at the time of booking or check-in.
Respect – and register – efforts to unsubscribe.
Another issue that may arise: A guest who has already consented to receive texts wants to revoke that consent. The law permits the guest to revoke consent via “any reasonable means.” There is wide latitude in those three words, so hotels must keep careful track of guests who have exercised their revocation right. Even if it seems onerous or tedious, the record-keeping is worth it if it nips a TCPA class action lawsuit in the bud.
Forestall expensive litigation with early-offense tactics.
A TCPA lawsuit brought against a resort or hotel over its use of a virtual concierge system can easily and quickly become very expensive and very time-consuming. In addition to the substantive issues of the TCPA claim, hotels ought to consider other potential strategies in litigation. For example, an arbitration agreement applicable to the putative class plaintiff — such as one agreed to by the guest at booking — could potentially end a class action lawsuit in its entirety before it even gets off the ground.