Don’t Mess with Texas

Meet Munsey: A Founder Navigating Hidden Rules

Munsey is the founder of a startup bringing innovative technology to wine and spirits producers across the United States of America and the World. His product is gaining traction, and Texas—a massive market for his customers—is next on his list. He’s been running digital ads, posting on LinkedIn, and sending email campaigns to drum up interest. Then, the phone starts ringing. Potential customers from Texas want to know more. It feels like success—until he learns about Texas Business & Commerce Code §302 - SB 140 (09/01/2025), from here forward §302 means the new law coming on the books..

Here’s the part most business owners miss: §302 doesn’t care how a lead found you. It doesn’t matter if the first touchpoint was an email, an ad, or a handshake at a trade show. What matters is what you communicate not how you do it.

Munsey is on the edge of a huge opportunity in Texas—but with rules he didn’t know existed. Under Texas Business & Commerce Code §302, it doesn’t matter how a lead found you. The moment you use a phone or text to sell—or an inbound call turns into a sales pitch—you’re inside its scope. As Marshall McLuhan said, “The medium is the massage.” Here, the medium—phone or text—is the trigger, and ignoring that could mean fines, lawsuits, or even criminal charges. So in Marshall's parlance, - THE MESSAGE IS THE MESSAGE

Finding a Guide in Uncharted Waters

Overwhelmed, Munsey calls Foonster. He needs more than a list of rules—he needs perspective from people who’ve been here before.

Here’s where Foonster steps in. We’ve been helping businesses navigate digital regulations since 2004. We know the questions to ask and how to prepare for what’s coming — even when the future is unclear. We can’t make the law go away, but we can help you make sense of it and get you talking to the correct people. YOUR LAWYER

Failing to register or follow these rules is no slap on the wrist. Operating without a valid certificate can lead to a Class A misdemeanor—punishable by fines up to $4,000 and even up to a year in jail. It’s far cheaper (and safer) to handle the paperwork than fight a state investigation.

For Munsey, that was enough to take the first step. Instead of guessing, he now has a guide who’s been in the trenches for decades—ready to help him face the uncertainty with a plan.

Munsey's Plan to Stay Legit Under Texas §302

Knowing the rules is one thing. Staying compliant is another. Texas makes it clear: if you want to sell by phone or text to Texas residents, you need to be registered and follow strict call rules. Here’s the simple plan:

Failing to register or follow these rules is no slap on the wrist. Operating without a valid certificate can lead to a Class A misdemeanor—punishable by fines up to $4,000 and even up to a year in jail. It’s far cheaper (and safer) to handle the paperwork than fight a state investigation.

Consequences of Non-Compliance: Why It’s a Big Deal

You might be thinking, “This sounds like a lot of red tape. What’s the worst that could happen if I don’t bother with all this?” The short answer: the consequences can be devastating for a small business. Texas authorities have multiple ways to enforce Code 302, and recent changes in law have only increased the stakes.

Legal Penalties: If you violate §302 (for example, by not registering, or not making required disclosures), you are committing a criminal offense. As mentioned, it’s a Class A misdemeanor in many cases:. Beyond the criminal aspect, the Texas Attorney General can bring civil action against you. Each illegal call or each time you break a rule is considered a separate violation, and the fines can add up very quickly. Historically, the civil penalty was up to $5,000 per violation:. However, starting September 2025, Texas has beefed up the law – now consumers themselves can sue, and statutory damages range from $500 up to $10,000 per violation. In other words, one bad telemarketing campaign that made, say, 100 unlawful calls could theoretically rack up as much as $1,000,000 in penalties. Even if actual penalties end up lower, the point is that non-compliance can be extremely costly.

Lawsuits by Consumers: Texas treats a violation of Chapter 302 as a deceptive trade practice, meaning consumers can sue you under the Texas Deceptive Trade Practices Act (DTPA). Under the DTPA and the new SB 140 amendments, an irritated call recipient doesn’t have to rely on the government – they can take you to court themselves. They could claim $500–$10,000 for each offending call or message, plus attorney’s fees. The court can also issue injunctions to stop your marketing activities. And there’s no cap on how many people can sue you or how many times – multiple consumers can pile on for the same campaign. For a small business, just defending a lawsuit (even before any judgment) is expensive and time-consuming. And if you lose, the damages and legal fees could bankrupt your company.

Reputation Damage: Beyond fines and lawsuits, think about your brand’s reputation. Getting hit with an “illegal telemarketing” accusation can scare off customers. It can also put you on regulators’ radar for future scrutiny. Compliance issues often become public (through court records or press releases), and you don’t want prospective clients googling your company and seeing that you broke telemarketing laws. It undermines trust and credibility that you’ll need for long-term success.

Staying Compliant and Successful

By now it’s clear that Texas’s telemarketing law (§302) is not something to take lightly. But with a bit of effort, you can comply and continue to reach customers effectively. Here’s a quick recap of what to do:

• Register before you call: Don’t make unsolicited sales calls or texts in Texas until you have that registration certificate in hand. The process costs $200 and requires a $10k bond – factor it into your marketing budget as a cost of doing business.
• Train your team: Ensure anyone who calls customers (sales reps, customer service, even third-party marketers) knows the do’s and don’ts. Provide them with approved scripts that include all required disclosures and honesty. Make sure they know to identify the business and not to make false promises.
• Review your lead generation practices: If you collect phone numbers online, add a note or checkbox for consent to be called, if possible. While Texas doesn’t require written consent for live calls (beyond federal TCPA rules for certain calls), having a record of someone requesting a call can help show you’re acting in good faith. But remember, even an inquiry only gives you a 12-month window in Texas to call legally as an established business relationship – after that, you’re back to square one.
• Monitor compliance continuously: Laws can change, as we saw with the 2025 update including texts and higher penalties. Stay informed about telemarketing regulations. Consider subscribing to industry updates or consulting with experts periodically. If your marketing strategy changes (say you start a texting campaign), double-check the legal implications first.
• Leverage professional help: If all of this feels overwhelming, you’re not alone. Many small businesses turn to marketing compliance services (like Foonster’s marketing compliance and outreach solutions) to handle the nitty-gritty. Outsourcing the compliance aspect lets you focus on your business while knowing that your campaigns won’t put you in legal hot water.

The bottom line: Responsible marketing is smart marketing. By following Texas Code 302, you’re not just avoiding penalties – you’re also building a trustworthy reputation with customers. People today are wary of spammy calls and scams. When you do things by the book (identifying yourself, respecting their privacy, etc.), you differentiate your business as professional and credible.

Don’t view compliance as a hurdle; see it as part of your value proposition. It shows you respect your audience. And with the right guidance and processes in place, staying compliant is very achievable. Many businesses have successfully integrated these rules into their sales strategy and continue to thrive in their outreach.

If you’re unsure about any aspect of this law or need a hand setting up a compliant telemarketing strategy, consider reaching out for expert help. At Foonster, we specialize in helping businesses grow their customer base while staying safe under laws like Texas’s §302. Compliance might not be the most glamorous part of marketing, but it’s an investment in your company’s future.