Dive Brief:
- Temu is facing a class action lawsuit that accuses the fast fashion giant of sending unsolicited text messages to consumers who have opted out of them, according to court documents filed last week.
- On April 10, the plaintiff in the lawsuit attempted to opt out of Temu’s marketing text messages by texting “Stop,” but the marketing texts continued, according to the complaint.
- Attorneys are seeking a jury trial, and further allege that Temu’s behavior resulted in “the intrusion upon seclusion, invasion of privacy, harassment, aggravation, and disruption of the daily life” of the plaintiff and class members.
Dive Insight:
This is the second class action lawsuit recently brought against Temu under the Telephone Consumer Protection Act. Last month, Temu’s holding company Whaleco Inc. was sued for sending promotional text messages to phone numbers on the national do-not-call registry. That case is ongoing.
The new complaint was filed on Aug. 21 in the U.S. District Court for the Eastern District of California.
In the complaint, attorneys said Temu’s “refusal to honor Plaintiff’s opt-out requests” shows that it doesn’t maintain a stand-alone do-not-call list, and further claims Temu doesn’t provide training to its telemarketing personnel.
“Temu takes consumer protection seriously,” a Temu spokesperson said in an email to Fashion Dive. “We believe the lawsuit is without merit and intend to defend our interests vigorously.”
In addition to these two class action cases regarding text messages, Temu is facing two other class action lawsuits related to data privacy.
Last year, Temu was accused of failing to secure its customers’ personal and financial data and failing to disclose the extent of a data breach and notify customers affected. The complaint additionally accused Temu of wiretapping the electronic communications of its website visitors, saying the company gains access to its users’ cameras and microphones while using the app.
In another case, Temu was sued for allegedly misleading consumers about the scope and reach of its data collection. The complaint said Temu intentionally loaded dangerous malware and spyware onto users’ devices and collected biometric information such as facial characteristics, voiceprints and fingerprints from consumers.
Both cases are ongoing.
Recent surveys have shown that Temu remains popular among budget-conscious consumers. However, one report from Omnisend found that only 6% of surveyed U.S. consumers trust Temu, although 68% still shopped there.
Temu holding company PDD Holdings released second-quarter earnings Monday, in which it reported 97.1 billion yuan, or about $13.6 billion, in revenue for the period. Its revenue growth rate slowed quarter-on-quarter, according to Jun Liu, vice president of finance at PDD.
“Profitability will also likely to be impacted as we continue to invest resolutely,” Liu said in the PDD release.
Following the announcement, shares of PDD dropped 29%, its worst loss since its 2018 IPO, according to a report from Bloomberg.
