Temu and its holding company Whaleco have another case in the growing pile of lawsuits being waged against them thanks to a new class action complaint alleging that Whaleco harassed and annoyed consumers with spam sales calls and texts that directed them to Temu’s website even though they were registered on the national do-not-call list. It is the third class action filed against the company in the last year, and the latest illustration of how consumers and regulators, alike, are becoming increasingly distrustful of the e-commerce giant, despite its claims that its operations are legally above-board.
In the newly-filed lawsuit, which was lodged with the U.S. District Court for the District of Massachusetts on July 3, Plaintiff Phyllis King accuses Whaleco of violating the Telephone Consumer Protection Act (“TCPA”), which prohibits companies from telemarketing to individuals that have registered with the national do-not-call list. King’s complaint emphasizes that do-not-call registrations must be honored indefinitely unless canceled by an individual or removed by the database administrator. Since that has not happened in her case, King claims that Whaleco’s “annoying and harassing calls” should to be addressed under the TCPA, which can result in penalties of $500 per violation, with willful violations going up to $1,500 per violation.
According to the complaint, King received four telemarketing text messages from Whaleco in April 2024, promoting deals and directing her to Temu’s website. King asserts that her number has been registered on the national do-not-call registry since 2022 and that she never provided Whaleco with her consent to receive such messages. Still, Whaleco sent the text messages anyway, she claims.
The class element of the lawsuit comes into play, King asserts, as the number of people who potentially experienced what she did likely amounts to “hundreds” of people because of “the en masse nature of telemarketing calls and text messages.” King and all members of the proposed class were harmed by Whaleco’s actions, the complaint states, not only by the “multiple involuntary telephone and electrical charges,” but also because of the “invasion of their privacy, aggravation, annoyance, waste of time, the intrusion on their telephone that occupied ti from receiving legitimate communications,” not to mention the violation of their statutory rights.
In addition to a certification of her proposed class action, King is seeking a jury trial and damages, stating that “all members of the class” were “harmed by the acts of [Whaleco] because their privacy has been violated and that they were subjected to unlawful calls that “constitute a nuisance.” She asks the court for an order enjoining Temu’s owner from making telemarketing calls and text messages to numbers on the national do-not-call registry, absent an emergency circumstance; damages, as allowed by law; and an award of attorney’s fees and other costs; among other remedies.
> TCPA Breakdown: Enacted by Congress in 1991 (along with the national do-not-call registry) with the aim of reigning in the rapid expansion of the telemarketing industry, and the invasion of privacy it posed, violations of the TCPA, including in the form of phone calls and text messages, have come at great cost to companies that have crossed it in the past.
In December 2020, for instance, DISH Network was found liable for over 65 million violations of the TCPA, resulting in a penalty initially set at $280 million. Another major case, which came about in 2014, saw Sprint fined $7.5 million by the Federal Communications Commission for repeated violations of the do-not-call rules, despite previous settlements for similar infractions. Additionally, last year, the Federal Communications Commission imposed a record $300 million fine on a network of companies involved in an auto warranty robocall scheme that made over 5 billion calls to numbers on the do-not-call registry
THE BIGGER PICTURE: TCPA aside, the most recent lawsuit illustrates a growing distrust of Temu and its parent company, from both consumers and regulators, alike. Most recently on the regulator side, the state of Arkansas filed a lawsuit against Temu earlier this month, in which it targeted the company’s alleged failure to protect customer data. Additionally, a U.S. Congressional body launched an investigation into Temu’s data security practices and potential national security threats, while the U.S.-China Economic and Security Review Commission echoed these concerns, urging vigilance and new policies to address such issues.
As for consumer trust, the lawsuit follows two other class action lawsuits, filed by consumers in the U.S. District Court for the Northern District of Illinois and the U.S. District Court for the Eastern District of New York in late 2023. Those suits lodge similar claims as Arkansas’ case, accusing Temu of failing to protect customer data tracking user activity on third-party websites and embedding malware in its app, while misleading consumers about data access.
Meanwhile, a recent survey from marketing software company Omnisend found that 86 percent of U.S. consumers surveyed trust Amazon, compared to only 6 percent who trust Temu, even though 68 percent of U.S.-based respondents said that they shop on Temu. Poor quality products and too much advertising ranked among key consumer complaints when it comes to Temu, the survey found. Despite the low trust levels, the survey found consumers are attracted to Temu primarily for its prices (53 percent), ease of use (31 percent), and deals and discounts (29 percent).
A spokesperson for Temu told TFL, “Temu takes consumer protection seriously. We believe the lawsuit is without merit and intend to defend our interests vigorously.”
The case is Phyllis King v. Whaleco Inc., 1:24-cv-11720 (D. Mass.).
Share
