Navigating Texas SB140: Implications for Text Message Marketing Compliance

On June 20, 2025, Governor Abbott signed SB140 into law. The new telemarketing requirements and expanded enforcement provisions will take effect on September 1, 2025. This significant piece of legislation fundamentally reshapes the landscape for businesses engaged in text message marketing to Texas consumers, creating new compliance obligations and substantially increasing litigation risks.

December 2025 Update

There have been significant updates to the SB 140 compliance landscape, with a lawsuit filed by an industry group seeking clarity from the Texas Attorney General and a subsequent settlement that provided some clarity.

Overview of Texas SB 140

Texas SB140 significantly amends Texas’s telemarketing statute, which is part of the Texas Business and Commerce Code (“TBCC”), expanding what many legal practitioners refer to as Texas’s “Mini-TCPA.” The law broadens the scope of regulated activities beyond traditional voice calls to encompass modern digital marketing practices that have become ubiquitous in today’s business environment.

Background: Closing the Text Message Loophole

SB 140 was enacted to address a significant regulatory gap exposed in the 2022 court case Powers v. One Technologies, where a company successfully argued that text messages were not covered under Texas Business and Commerce Code Chapter 302’s original definition of “telephone solicitation.” This legal loophole allowed businesses to send unsolicited text messages to Texas residents without falling under the state’s telemarketing regulations.

The new law closes this gap by cross-referencing Section 304.002’s broader definition of “telephone call,” which already includes text and multimedia messages, thereby bringing SMS and MMS communications under the telemarketing statute’s regulatory framework.

Expanded Definition of Telemarketing Communications

The most significant change under SB 140 is the expansion of the definition of “telephone solicitation.” Under Chapter 302, the applicable definition of “telephone solicitation” is amended to include text messages (SMS) and image and graphic messages (MMS). As of September 1, 2025, the definition of “telephone solicitation” will be revised to read as follows: “a call or other transmission, including…”

This expansion means that SMS, MMS, or other visual solicitations are now explicitly within the scope of Texas’s telemarketing regulations. Previously, Texas’s telemarketing law focused on live or prerecorded voice communications, leaving significant ambiguity about whether text-based marketing fell under the state’s regulatory framework.

Importantly, the expanded definition also captures inbound calls from consumers that are made in response to a solicitation, regardless of how that solicitation was delivered. This means that even when a consumer initiates contact after receiving a marketing message, that interaction may still be subject to telemarketing regulations under the new law.

Key Compliance Requirements

Prior Express Written Consent

Businesses must obtain prior express written consent (PEWC) before sending automated or prerecorded marketing messages to customers in Texas. This consent must be explicit, documented, and include disclosures about the use of automated technologies. Importantly, opt-in mechanisms must be clear, and any related checkboxes must be unchecked by default—no pre-checked boxes are permitted.

Registration and Financial Security Requirements

One of the most burdensome aspects of SB 140 is the registration requirement for businesses engaged in telemarketing to Texas residents. Companies must:

• Register with the Texas Secretary of State
• Pay a $200 annual registration fee
• Establish and document a $10,000 security deposit or bond to cover potential compliance violations
• Failure to register can result in fines up to $5,000 per violation

However, the law provides specific exemptions from the registration requirement. Under Section 302.058, the following entities are exempt from registration: publicly traded companies and their subsidiaries; retail sellers with brick and mortar locations that have operated under the same name for at least two years; businesses soliciting their own current or former customers (subject to the definitional ambiguities discussed below); and certain other limited categories defined in the statute. These exemptions are narrowly construed, and businesses should carefully evaluate whether they qualify before relying on an exemption to avoid registration.

Opt-Out Requirements

Every message must provide a clear and easy way for consumers to opt out (e.g., “STOP”, “UNSUBSCRIBE”). Opt-out requests must be honored immediately, with no delay.

Time Restrictions

Additionally, the Texas Telemarketing Statute (TTSA) prohibits telemarketing communications to residential phone numbers before 9:00 AM and after 9:00 PM on weekdays and Saturdays, and before 12:00 PM (noon) and after 9:00 PM on Sundays. These restrictions must be followed according to the recipient’s actual time zone, not the time zone associated with the area code of the phone number.

Recordkeeping Requirements

Detailed records must be maintained for consent, opt-outs, message timing, and registrations. These records are critical for legal defense against any claims that may arise under the enhanced enforcement provisions.

Texas No-Call List and Caller ID Requirements

Businesses must scrub their call and messaging lists against both the Texas No-Call List and the Electric No-Call List (for utility-related communications), even if they already comply with the federal Do Not Call Registry. Contact lists must be scrubbed against these registries at least every 60 days to ensure ongoing compliance.

Additionally, caller ID information must be accurate and not blocked, and proper disclosures must be made according to statutory requirements.

Enhanced Enforcement and Litigation Risk

The Plaintiff’s Bar’s Preferred Litigation Vector

TCPA-type litigation at both the federal level and for state-specific TCPA-type laws (also referred to as “mini-TCPA” laws) represents one of the plaintiff’s bar’s favorite vectors of attack. Similar to the proliferation of ADA website compliance lawsuits and California Invasion of Privacy Act (CIPA) wiretapping claims, these cases offer plaintiffs’ attorneys the opportunity to pursue statutory damages, with the potential for recovery of attorneys’ fees. Therefore, the litigation risk associated with SB 140 is significant, and businesses can expect aggressive testing of the law’s boundaries, including challenges to companies that have obtained prior express written consent for texting consumers who have not yet made a purchase.

Removal of Enforcement Barriers

SB 140 significantly alters the process by which consumers can pursue telemarketing violations, removing substantial procedural barriers. Previously, consumers had to first notify the telemarketer of a violation and file a complaint with a state agency. Only if the agency did not take action after 120 days could a consumer sue the business directly. SB 140 removes these hurdles by allowing consumers to sue businesses directly as they would under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), making enforcement much more immediate and accessible to plaintiffs.

Private Right of Action Under DTPA

With SB 140 set to take effect on September 1, 2025, businesses that communicate with Texas consumers by phone, text, or similar channels face heightened compliance obligations and a significantly increased risk of litigation.

SB 140 treats telemarketing violations as deceptive trade practices, allowing consumers to sue businesses directly without waiting for administrative enforcement. The enhanced private right of action includes:

• Damages ranging from $500 to $10,000 per violation
• Potential for treble damages if misconduct is found to be intentional
• Recovery of attorney’s fees and injunctive relief
• The new law clarifies that multiple legal recoveries for the same violation will not limit future recovery

The enhanced enforcement specifically applies to violations such as calling numbers on the Texas No-Call list, calling outside of time-of-day restrictions, failing to follow caller ID and disclosure requirements, operating without proper registration, failing to maintain required security deposits or bonds, and violating consent requirements for automated messaging.

This creates a particularly challenging environment for businesses, as repeated violations can result in multiple lawsuits and cumulative damages that can quickly reach substantial amounts.

Compliance Challenges and Uncertainty

The “Current or Former Customer” Exemption Ambiguity

One of the most significant sources of uncertainty under SB 140 relates to the exemption for solicitations to “current or former customers.” The statute provides an exemption if the business has operated under the same name for at least two years and is soliciting business from former or current customers. However, for purposes of the § 302.058 exemption, the law does not define current or former “customers.”

Legal Analysis of “Customer” Definition

According to legal analysis by Kelley Drye & Warren LLP, related terms in other Chapters can potentially be read in context to provide guidance on this definition. They note that Texas law defines an “established business relationship” as one that “(A) is formed by voluntary two-way communication between a person and a consumer, regardless of whether consideration is exchanged; (B) pertains to a consumer good or service offered by the person; and (C) has not been terminated by either party” under Texas Business & Commerce Code § 304.002(4).

Based on this definition and the common understanding of the term “customer,” the firm states that “a Texas court would likely only include individuals that have at least engaged in some sort of voluntary marketing-related communication with the business, or that have affirmatively reached out to the business in the scope of ‘current customer.'” Importantly, they note that “a customer relationship cannot be formed by a business’s one-way communications only.”

However, it is crucial to understand that this interpretation remains an open legal question, and registration will be the position of least risk. No Texas court has definitively ruled on how the customer exemption applies under SB 140, and the statutory language leaves significant room for different interpretations. Businesses should not rely solely on any single legal analysis when making compliance decisions.

This interpretation creates particular challenges for e-commerce businesses that may send marketing text messages to individuals who have:

• Signed up for marketing communications but haven’t made a purchase (potentially qualifying if there was voluntary two-way communication)
• Made purchases in the past but haven’t been active recently (likely qualifying as former customers)
• Created accounts or engaged with the business but never completed transactions (questionable without clear voluntary engagement)
• Only provided contact information through one-way interactions (likely not qualifying)

The requirement for “voluntary two-way communication” under this interpretation suggests that merely providing contact information through a website form may not be sufficient to establish a customer relationship unless there is some form of interactive engagement or affirmative outreach by the consumer.

Given the unsettled nature of this legal question, businesses must make risk-based decisions about whether their communications qualify for the exemption, ideally with guidance from experienced legal counsel familiar with Texas telemarketing law.

Geographic Compliance Challenges

Another significant compliance challenge involves accurately identifying Texas residents. Businesses must navigate the complexity of determining when someone with a non-Texas phone number who has provided a Texas address should be considered a Texas resident for purposes of the law. This geographic ambiguity compounds the compliance burden, particularly for national e-commerce operations.

Regulatory Guidance Vacuum

The Texas Secretary of State’s office has taken the position that it cannot provide legal interpretations of the statute. The Secretary of State functions as a “ministerial filing office” and has indicated that “the Texas Attorney General is charged with the enforcement of the registration requirements and/or violations of the Act.”

This creates a situation where businesses must make compliance decisions without clear regulatory guidance, increasing legal uncertainty and risk.

Lawsuits Challenging the Law

Industry Response and Strategic Approaches

The lack of clarity in SB 140 has led to divergent approaches within the business community:

Conservative Registration Approach

Some businesses are proceeding with full registration, including:

• Filing the required applications
• Securing surety bonds or letters of credit
• Implementing comprehensive compliance programs
• Maintaining detailed recordkeeping systems

Risk-Based Wait-and-See Approach

Other companies are adopting a “wait-and-see” strategy, which may include:

• Suspending text marketing to all Texas residents
• Implementing geographic blocking based on phone numbers and addresses
• Waiting for regulatory guidance or litigation outcomes to provide clarity

Hybrid Mitigation Strategies

Many businesses are implementing intermediate approaches, such as:

• Enhanced consent collection procedures
• Improved opt-out mechanisms
• Geographic targeting refinements
• Legal risk assessments on a case-by-case basis

Looking Ahead: The Need for Clarity

If you send mobile messages to customers in Texas, this law will impact you when it takes effect on September 1, 2025. The current regulatory environment leaves businesses in a difficult position, as they must choose between potentially onerous registration requirements or risk-mitigation measures that may significantly impact their marketing operations.

Ideally, clarity will come through multiple channels:

• Regulatory Guidance: The Texas Attorney General or other regulatory bodies may issue interpretive guidance
• Judicial Interpretation: Litigation outcomes may provide clearer boundaries for compliance requirements
• Legislative Clarification: Future amendments could address existing ambiguities

Recommendations for Businesses

Given the current uncertainty and significant compliance obligations, businesses should consider:

1. Immediate Risk Assessment: Evaluate current text marketing practices against SB 140 requirements
2. Legal Consultation: Work with experienced telecommunications law counsel to navigate text message compliance decisions and develop tailored strategies that address both federal and state requirements.
3. Documentation Enhancement: Implement robust consent collection and recordkeeping procedures
4. Geographic Controls: Develop systems to accurately identify and manage communications with Texas residents
5. Monitoring and Adaptation: Stay informed about regulatory developments and industry litigation

Conclusion

Texas SB 140 represents a significant expansion of state-level regulation of digital marketing communications. SB140 expands the scope of what constitutes telemarketing under Texas’s telemarketing registration and call disclosures law and introduces powerful new enforcement mechanisms. While the law creates substantial new compliance obligations and litigation risks, the current ambiguities in its application necessitate that businesses make difficult strategic decisions in an uncertain regulatory environment.

The coming months will hopefully provide greater clarity through regulatory guidance, industry practices, and judicial interpretation. In the meantime, businesses must carefully balance compliance costs against litigation risks while maintaining effective marketing operations. The stakes are high, but with proper legal guidance and comprehensive compliance programs, businesses can navigate this challenging new landscape while minimizing exposure to the enhanced enforcement mechanisms under Texas’s expanded “Mini-TCPA.”

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