FAKE LEAD?: Arbitration Denied in TCPA Class Action After Plaintiff Denies Visiting DMS-Run Sweepstakes Website

Digital Media Solutions has been in the TCPAWorld news a lot lately.

I mean, most because of the whole bankruptcy thing.

BANKRUPTCY: DMS Enters Chapter 11–is The TCPA to Blame?

But if you search “DMS” in TCPAWorld you’ll find some other interesting stories as well. I’ll leave you to that.

For now here is an interesting one.

SmartMatch Insurance is in a TCPA lawsuit after buying a lead from DMS. It moved to compel arbitration but the motion was denied. Why? Because Plaintiff denies visiting the survey website at issue.

Per the court:

This motion hinges upon the formation of an arbitration agreement. Defendant claims that an agreement was formed when “a website user identifying herself as [plaintiff]” used an iPhone to access a website owned by Digital Media Solutions, LLC (“DMS”). [15 1] ¶ 6. The website touted the chance to win $25,000 in exchange for completing a survey of personal information. Id. ¶ 8. Defendant asserts that this “website user” was, in fact, plaintiff. Id. ¶ 14. According to defendant, plaintiff registered for the sweepstakes by entering her name, address, email, and phone number into the survey, checking a box agreeing to hyperlinked Terms of Service (“TOS”), and hitting “CONTINUE.” Id. ¶¶ 6, 11, 14. 1 The hyperlinked TOS led to a page which included the arbitration agreement at issue. Id. ¶ 11; [15-2] at 2. Defendant contends that, by checking the box and clicking “CONTINUE,” plaintiff entered into an arbitration agreement with DMS and its third parties—including defendant. [16] at 10.

But the court denied arbitration because the plaintiff denied visiting the website (i.e. claimed DMS sold a fake lead):

For her part, plaintiff alleges that she never visited DMS’s website, never registered for the $25,000 sweepstakes, never submitted her personal information to DMS, and never agreed to DMS’s TOS. [19-1] ¶¶ 4, 6, 8, 15. And in any event, she argues, the “website user” could not possibly have been her: She owned a Samsung Android—not an iPhone on the date of submission. [19] at 3.

The case is Woodard v. Smartmatch, 2024 WL 4252803 (N.D. Ill. Sept 20, 2024) and it is headed to trial on the arbitration issue shortly.

Obviously this is yet another indictment of third-party leads. Can’t trust them–unless they comply with the R.E.A.C.H. standards, because then you know they aren’t fraud. Plus this was a sweepstakes website–totally illegal after the new one-to-one rule becomes effective in January.

This is the PERFECT case to lead us into LeadsCon Connect this week. Will be fun discussing.

See you all there!