Robinhood Markets, Inc. and subsidiary Robinhood Financial LLC are facing a proposed class action lawsuit that claims the investment brokerage companies violated the Washington Commercial Electronic Mail Act (CEMA) by encouraging existing users to send unsolicited spam text messages to friends.
According to the complaint, Robinhood ran a “refer-a-friend” program through which subscribers could send acquaintances text advertisements that urged the recipient to register for the defendants’ online brokerage services in exchange for incentives such as free stocks. The lead plaintiff allegedly received the following text in July 2019 that encouraged him to create an account with Robinhood:
“Your free stock is waiting for you! Join Robinhood and we’ll both get a stock like Apple, Ford, or Facebook for free. Sign up with my link. [attachment with link]”
The text, which the suit says did not contain a “stop” or “opt-out” provision, was allegedly sent without the plaintiff’s “clear and affirmative consent.” The case contends that Robinhood “initiated or assisted in the transmission” of text messages to “millions” of other Washington residents without first obtaining their express written consent to do so, an apparent violation of the CEMA.
The lawsuit looks to represent a class covering all Washington residents to whom the defendants sent, or assisted in the transmission of, one or more commercial texts without obtaining clear and affirmative consent within the four years prior to class certification. The suit, which was recently removed to the Eastern District of Washington, seeks damages of up to $1,500 for each alleged violation against proposed class members.