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Is Cold SMS Illegal?

Short answer: Cold SMS marketing is not illegal, but it must comply with strict regulations like the Spam Act 2003 in Australia. You need explicit consent before messaging, provide clear identification, include opt-out options, and honor unsubscribe requests promptly. Breaking these rules can result in penalties up to $2.1 million per day for organizations.

Have you ever received a random text message from a business you’ve never interacted with before? That uncomfortable feeling of “how did they get my number?” isn’t just annoying—it raises important legal questions.

Cold SMS—sending unsolicited text messages to potential customers without prior consent—exists in a complicated legal territory that varies by country and region. Understanding these rules isn’t just about avoiding fines; it’s about respecting customer privacy and building trust.

The most fundamental requirement for legal SMS marketing is obtaining proper consent. But what exactly counts as “consent” in the eyes of the law?

Consent must be explicit and informed. This means recipients must actively agree to receive your messages—not through pre-checked boxes or buried in terms and conditions.

Remember that time you entered a competition and didn’t notice the tiny text saying you’d receive marketing messages? That’s exactly what regulators are cracking down on.

In Australia, the Spam Act 2003 clearly requires:

  1. Express consent (opt-in)
  2. Clear identification of the sender
  3. Simple unsubscribe options

Without these elements, your cold SMS campaign isn’t just ineffective—it’s potentially illegal.

“Permission marketing is the privilege of delivering anticipated, personal and relevant messages to people who actually want to get them.” – Seth Godin

Cold SMS vs. Permission-Based SMS

Not all business text messages are created equal in the eyes of the law.

Cold SMS: Sending messages to people who have never interacted with your business or explicitly agreed to receive communications.

Permission-Based SMS: Messaging contacts who have given consent through previous interactions, opt-ins, or customer relationships.

Are you sending messages to a purchased list of numbers? That’s cold SMS and likely violates regulations in most countries.

Let’s explore what makes SMS marketing legal or illegal across different regions.

Regional SMS Regulations You Must Know

Australia’s Spam Act 2003

For Australian businesses, the Spam Act establishes three key requirements:

  1. Consent: You must have permission before sending marketing messages
  2. Identification: Your business must be clearly identified in each message
  3. Unsubscribe option: Every message needs a simple way to opt out

Penalties for violating these rules are severe—up to $2.1 million per day for organizations that repeatedly break the law.

United States: TCPA Compliance

In the US, the Telephone Consumer Protection Act (TCPA) governs SMS marketing:

  • Businesses need prior written consent before sending marketing texts
  • Each message must identify the sender and include opt-out instructions
  • Violations can cost between $500-$1,500 per text message

Have you calculated what a $1,500 fine per message would mean for your bulk SMS campaign? The financial risk is enormous.

European GDPR Requirements

Under the General Data Protection Regulation (GDPR):

  • Explicit consent is mandatory
  • You must document when and how consent was obtained
  • Recipients have the “right to be forgotten”

The GDPR has raised the bar globally for handling personal data, with potential fines up to €20 million or 4% of annual global turnover.

Let’s be practical about what constitutes legal consent:

Valid consent includes:

  • Opt-in forms on your website
  • Text-to-join campaigns
  • Written agreements during purchases
  • Paper forms with clear disclosure

Invalid consent methods:

  • Purchased phone lists
  • Pre-checked boxes
  • Assuming consent from prior relationships
  • Business card collection without disclosure

Remember: Even existing customer relationships require clear disclosure about SMS marketing before you start sending messages.

Following these best practices will help keep your SMS marketing legal:

  1. Get clear permission: Use double opt-in processes when possible
  2. Keep consent records: Document when and how people joined your list
  3. Identify yourself: Start messages with your business name
  4. Provide value: Send relevant, useful content people actually want
  5. Include opt-out options: Make it easy with “reply STOP” instructions
  6. Honor unsubscribes immediately: Remove opt-outs within 10 days (though same-day is best practice)

The Business Case for Compliant SMS Marketing

Beyond avoiding legal trouble, compliant SMS marketing is simply better for business. When you message people who genuinely want to hear from you:

  • Response rates increase dramatically
  • Conversion rates improve
  • Customer relationships strengthen
  • Your brand reputation remains positive

Would you rather have a list of 500 engaged contacts or 5,000 uninterested numbers that might trigger legal issues?

Wondering how to create a compliant SMS marketing approach? Start here:

  1. Audit your current consent practices: Review how you’re collecting phone numbers
  2. Create clear opt-in language: “By providing your number, you consent to receive promotional SMS messages. Reply STOP to opt out.”
  3. Segment your audience: Different messages for different customer groups
  4. Measure engagement: Track which messages drive responses
  5. Test and refine: Improve your approach based on results

SMS remains an incredibly effective marketing channel when used correctly, with open rates around 98% compared to email’s 20%.

Modern Alternatives to Cold SMS

If you’re concerned about compliance, consider these alternatives:

  1. Warm messaging: Contact people after initial contact through other channels
  2. Social media outreach: Connect on platforms where business messaging is expected
  3. Email marketing: Often has less stringent consent requirements
  4. RCS messaging: Rich Communication Services offers enhanced features while maintaining compliance

The Future of Compliant SMS Marketing

As privacy regulations tighten globally, successful businesses will:

  • Prioritize quality relationships over quantity
  • Embrace transparent communication practices
  • Invest in proper consent management technology
  • Use SMS primarily for high-value communications

The cost of compliance is always lower than the cost of violations.

Finding the Right SMS Partner

Using a reputable SMS service provider can help ensure compliance. 160.com.au has been providing SMS solutions in Australia since 2000, with features specifically designed to help businesses stay compliant:

  • Consent management tools
  • Automated opt-out processing
  • Detailed delivery reports
  • Message personalization
  • API integration capabilities

Their cloud-based platform allows you to manage SMS marketing from anywhere, with no monthly fees or contracts—just pay for the messages you send, with enterprise-level security protecting your data and customer information.

Remember, effective marketing isn’t about reaching everyone—it’s about reaching the right people with messages they actually want. When you prioritize compliance and consent, your SMS campaigns will not only stay legal but deliver substantially better results.