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Text messaging services are being used increasingly by businesses and their employees to do their work. It’s quick, easy, and reliable. Employees can use these services to communicate amongst themselves, but also with their customers.

For example, this summer I added a service on my cell phone plan and the employee gave me his cell phone number. He told me I could text him instead of calling customer service to cancel. I did end up cancelling via text message and it was easy and quick with the added bonus of not having to speak to another human being!

Frequently in business, text messages are not thought of as being electronic records like emails would be. This leads to a lack of a record keeping system or some oversight set in place to manage these records. The Smarsh 2016 Electronic Communications Compliance Survey Report shows that only 32% of businesses have a record management solution in place for text messaging.

This lack of oversight opens a company up to great risk. This blog will discuss four.

Legal Risk

The first major risk to a company is a legal one. Text messages are considered electronically relevant material and can be requested during e-discovery or litigation. E- discovery is the search for, identification, and protection of electronic records that are relevant and needed as evidence in a specific legal proceeding.

It does not matter if the text messages were sent on an employee’s personal device or a company device. If the text message is business related, it is relevant and could be required.

Companies must include text messages in their own records management system because they cannot rely on the cell phone providers for this data. The majority of cellular providers do not retain the content of text messages for more than a few days. Some cell phone service providers do not retain the content at all.

If a company fails to produce the requested text messages in a timely manner then they are open to legal consequences related to spoliation, failure to produce requested data, and high legal fees. Spoliation is the tampering, destruction, or concealment of evidence that is relevant to current or future litigation. It can result in fines or incarceration.

Reputation Risk

A company’s brand is very important to its success. Text messages sent to customers are often not managed or monitored like social media or emails. One badly worded text sent to customers could damage your brand and reputation.

A large part of reputation also deals with transparency and accountability. This is especially true for governmental agencies. If the public becomes aware that governmental agencies are having difficulty producing text messages they may start to question or even lose the trust they had in that agency or representative.

Regulation Risk

Some sectors of business are highly regulated. For example, financial services firms are regulated through the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). These regulations require that all electronic communications related to business matters must be archived.

Text messages are considered electronic communications and they need to be preserved if the industry they are part of has record keeping requirements in their regulations. Non-compliance to these regulations can result in fines and suspensions of trade licenses.

Security Risk

Most text messaging services are not highly encrypted and are vulnerable to hacking. This is a security risk, especially if the messages contain sensitive commercial information of the company or personal information of individuals.

For example, hospital staff are increasingly using text messaging to communicate about patient care. This poses a huge risk for breaches in patient’s protected health information.

Companies must put policies in place to manage the use of text messaging. They need to determine what kinds of information can be shared over text. Additionally, companies could provide a dedicated app for business that is encrypted. This would mitigate the risk for security breaches.

Solutions

One might say that a solution to these risks is an outright banning of the practice. This is an unrealistic solution because using text messages to conduct business is not likely to stop even with a ban in place.

The 2017 Smarsh Electronic Communications Compliance Survey reports that only 33% of firms are confident that their prohibition of using text messages in their company is being followed. This means that simply prohibiting text messaging does not actually address the associated risks.

Businesses will likely need a range of records management policies and solutions to mitigate the risks we’ve discussed. Companies must create written guidelines on how text messaging can be used, what devices business communication can occur on (whether personal or company owned), and specify what information can be sent. These guidelines would limit both security and reputation risk.

Text messages are electronic records. There must be a records management solution in place for these electronic records to make sure a company is compliant with regulatory requirements. Having a solution in place will also protect companies and businesses from legal risks like spoliation.

To conclude, while using text messaging is easy and often thoughtless it can and does open businesses to inherent risks if not managed properly. These are legal, reputation, regulation, and security risks.