Robinhood Pays $9 Million in Settlement Over Unsolicited Text Messages in Washington

Robinhood Settles for $9 Million Over Unsolicited Texts in Washington

In a recent legal development, Robinhood pays $9 million to settle allegations of sending unsolicited text messages. This decision comes as a conclusion to a lawsuit that highlighted potential privacy violations under the Washington Commercial Electronic Mail Act and the Washington Consumer Protection Act.

Details of the Lawsuit

The lawsuit was initiated by plaintiffs Cooper Moore and Andrew Gillette, who argued that Robinhood’s referral program infringed upon state laws by dispatching promotional texts without recipients’ explicit consent. This program encouraged existing users to invite contacts to join Robinhood by sending referral links via text.

When a new user signed up through such a link, both the referrer and the newcomer would receive a free stock as a reward, thereby incentivizing the spread of these messages. As a result, the legal battle, which spanned over two years, culminated in the establishment of a non-reversionary Settlement Fund amounting to $9,000,000, intended to compensate the affected class members who stepped forward with claims.

Judicial Approval and Settlement Terms

U.S. Western District Court of Washington’s Judge Barbara J. Rothstein approved the settlement terms, deeming them “reasonable and adequate” given the complexities and potential duration of continued litigation. The class involved in this settlement includes approximately 827,327 consumers who reportedly received the unsolicited texts linked to Washington area codes.

The approved notice plan reached an impressive 96% of identified class members, with over 51,000 claims filed. The compensation for each validated claim will range between $111 and $170.

Attorneys’ Fees and Service Payments

The court also sanctioned $2,250,000 in attorneys’ fees and $142,400 for litigation expenses, which will be paid from the settlement fund. Additionally, the court awarded $10,000 each to plaintiffs Moore and Gillette for their service in the lawsuit.

Robinhood’s Crypto Expansion

Since its inception as a commission-free trading platform, Robinhood has broadened its scope to include cryptocurrency trading, starting in 2018. Initially supporting Bitcoin and Ethereum, the platform has since expanded to include other popular cryptocurrencies such as Dogecoin, Bitcoin Cash, and Litecoin. This move has positioned Robinhood as a significant player in the crypto recruitment and trading landscape.

Implications for Crypto and Tech Companies

This settlement, in which Robinhood pays $9 million, serves as a critical reminder for companies in the tech and crypto sectors about the importance of adhering to communication compliance laws, especially when dealing with marketing and user engagement strategies. Indeed, the outcome of this case could prompt other firms to reassess their policies to avoid similar legal challenges. Consequently, many companies might implement stricter guidelines. Ultimately, this could lead to a more cautious approach in their marketing efforts.

For more insights into how tech companies are navigating the complex terrain of legal compliance and user privacy, particularly in the blockchain and cryptocurrency domains, visit our articles on Web3 privacy and transparency and the rising demand for crypto lawyers post-regulation.

As the digital landscape continues to evolve, the intersection of technology, law, and user privacy remains a hotbed for development and debate, shaping the future of digital communication and commerce.

Robinhood Pays $9 Million in Settlement Over Unsolicited Text Messages in Washington

Robinhood Settles for $9 Million Over Unsolicited Texts in Washington

Details of the Lawsuit

Judicial Approval and Settlement Terms

Attorneys’ Fees and Service Payments

Robinhood’s Crypto Expansion

Implications for Crypto and Tech Companies

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