SEATTLE (LN) — U.S. District Judge Kymberly K. Evanson denied Chime’s motion to dismiss the consolidated class action brought by Joyce White and others, ruling the plaintiffs stated plausible claims that the company’s refer-a-friend program violates the Commercial Electronic Mail Act and the Consumer Protection Act.
Chime argued its referral program fell within a statutory exception for activities with a commercially significant use other than violating the law. The court disagreed, finding the exception was meant to shield telecommunications intermediaries, not financial technology companies.
Chime also contended it could not be held liable because it did not know or consciously avoid knowing that users sent the text messages without recipients’ consent. The court said the plaintiffs adequately alleged the knowledge element.
White alleged she received a referral text from a Chime user without her consent, and that the company’s mobile application “prominently promoted” the refer-a-friend feature with “Get $100” buttons that allowed users to send pre-composed marketing messages to their contacts with minimal effort. “The only additional action the user must take” is to tap the send message icon, the complaint alleged.
The court granted Chime’s motion to incorporate certain documents by reference, including the company’s Form S-1 registration statement and a blog post about its referral program. But those documents did not salvage the motion to dismiss.
The ruling follows similar decisions in this district involving refer-a-friend programs at Block Inc., Lyft, Robinhood, Capital One, and other companies. The court said Washington courts must construe consumer protection statutes “liberally in favor of the consumers they aim to protect.”
Chime did not immediately respond to a request for comment.