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Checkers settles direct-marketing lawsuit for $3.5M

The chain was accused of continuing to text deal offers to opted-in customers after they had opted out.
Photograph: Shutterstock

In an instance of targeted marketing going awry, Checkers Drive-In Restaurants has agreed to pay $3.5 million for allegedly texting consumers with deal offers after they had asked the quick-service chain to stop.

The payment was part of a settlement negotiated by Checkers and plaintiffs in a class-action lawsuit filed in federal court in January. Checkers admitted no wrongdoing nor agreed with the facts of the allegations in accepting the deal, which was approved yesterday by Judge Beth Bloom of the U.S. District Court serving Southern Florida.  

The suit accused Checkers of violating the Telephone Consumer Protection Act by sending at least one text offer to the cellphones of plaintiffs after they had followed instructions to stop receiving the transmissions. The plaintiffs had originally opted to receive information via text from the chain, but changed their minds. The unwanted messages were allegedly sent between January 2018 and the same month of this year.

Court documents show the communications were essentially promotional messages focused on a dish or price.

No reason was given for the failure of Checkers’ texting system to halt the come-ons.

Under the agreement, plaintiffs will receive up to $450 each. The lead plaintiff, Joel Medgebow, was designated by the court to receive $5,000.

Approval of the settlement comes as restaurant chains of all types are using new technology to push offers and communications directly to consumers, usually via their phones. Because of a privacy law enacted in California, the would-be recipients are now routinely required to opt into the process. Checkers’ situation was different because it dealt with opting out.

The Telephone Consumer Protection Act was passed in 1991 as a way of protecting the privacy of consumers. Its precise aim was to shield the public from being bombarded with telephone come-ons and sales pitches.

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