Jessy Edwards , Abraham Jewett  |  February 20, 2024

Category: Legal News

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Close up of Robinhood logo displayed on a smartphone screen, representing the Robinhood spam text class action lawsuit settlement.
(Photo Credit: Primakov/Shutterstock)

Update: 

  • Robinhood agreed to a $9 million settlement to end claims its refer-a-friend program caused consumers in Washington who don’t use the stock-trading app to receive unsolicited promotional texts. 
  • The pair of consumers behind the complaint filed a motion for preliminary approval of the Robinhood settlement. 
  • The proposed settlement class includes a Washington class of consumers who received a Robinhood Financial LLC referral program text message from Aug. 9, 2017, through the date of preliminary approval. 
  • The class action lawsuit claimed Robinhood violated Washington’s Commercial Electronic Mail Act and Consumer Protection Act.

Robinhood spam text lawsuit overview:

  • Who: A consumer has filed a class action lawsuit against Robinhood, the company behind the popular investment app, over alleged violations of marketing communication laws in Washington.
  • Why: The plaintiff claims Robinhood sent him a refer-a-friend marketing text message in violation of Washington’s Consumer Electronic Mail Act, which makes commercial text messages illegal to send to Washington residents.
  • Where: The lawsuit is being heard in federal court in Northern California, where Robinhood is based.

(Aug. 12, 2021)

Online investment firm Robinhood has been spamming Washington residents with marketing text messages in violation of the law, a new class action lawsuit alleges.

Plaintiff Cooper Moore filed the class action lawsuit against Robinhood Financial LLC on fTuesday in a California federal court, alleging violations of Washington’s Consumer Electronic Mail Act (CEMA).

Moore says the online investments brokerage service firm created a referral program called “Refer a Friend” to market its products and services. The company allegedly encourages users to refer their contacts by offering free stock for each successful referral. 

As soon as the user’s contact signs up for Robinhood and links his or her bank account, Robinhood credits both the referring user and the referred contact with reward stock. 

Moore says Robinhood initiated or assisted in sending him a refer-a-friend marketing text message while he was a Washington resident. 

He says the text violated CEMA, which makes it illegal for a person to “initiate or assist in the transmission of an electronic commercial text message to a telephone number assigned to a Washington resident for cellular telephone or pager service.”

Moore alleges that Robinhood’s mobile application makes it easy for users to refer friends, through a process of tapping a few items in the app, which then invites friends through your contacts. 

“The refer-a-friend model is a powerful method of mass marketing. At very minimal cost, Robinhood achieves targeted, immediate, and extensive promotion of its brand,” the class action lawsuit says.

Moore says he is bringing the class action lawsuit on behalf of any Washington resident who also received “Robinhood’s illegal spam texts.” 

He’s seeking an injunction to end the alleged practice, an award to class members of damages for each illegal text of $500, plus treble damages, and an award of attorneys’ fees and costs. 

He says he estimates the total damages to be greater than $5 million. 

This is not the only million-dollar class action lawsuit Robinhood is facing. In July, investors also filed a class action lawsuit against the company, claiming Robinhood lost them $10 billion by cutting off their access to volatile stocks such as GameStop earlier this year.

The Robinhood lawsuit alleges that the financial services company had not capitalized its business or implemented adequate risk controls, which resulted in trading restrictions and loss for investors.

What do you think of the refer-a-friend function in the Robinhood app? Have you ever received spam texts from Robinhood? Let us know in the comments.

The plaintiff is represented by Sophia M. Rios and E. Michelle Drake of Berger Montague PC and Beth E. Terrell and Jennifer Rust Murray of Terrell Marshall Law Group.

The Robinhood spam text class action lawsuit is Moore et al., v. Robinhood Financial LLC, Case No. 3:21-cv-06117-JCS in the U.S. District Court Northern District of California. 


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34 thoughts onRobinhood agrees to $9M unsolicited text message settlement

  1. Marc Alan Reichbart says:

    Please let me know when
    Please add me

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