Is Chime Facing A $500 Per-Text Penalty? Everything To Know About The Unsolicited Text Messages Class Action
A new legal challenge is facing Chime Financial, Inc., one of the nation’s largest fintech companies, as a class action lawsuit alleging the transmission of unsolicited "refer a friend" text messages gains traction. This specific litigation, which is actively being investigated and litigated as of December 24, 2025, centers on alleged violations of a powerful state-level consumer protection statute: the Washington Consumer Electronic Mail Act (CEMA). Unlike many federal lawsuits, this case focuses on state law to seek substantial statutory damages, potentially exposing Chime to a $500 penalty for every single unsolicited text message sent to Washington residents. The core issue revolves around Chime's highly successful referral program and whether the company provided sufficient legal disclosures and obtained the necessary consent from recipients.
The lawsuit is not a typical federal Telephone Consumer Protection Act (TCPA) claim but rather highlights the growing trend of state laws being used to combat text message spam, or "smishing." Consumers who received a text message promoting Chime's services without their express permission, particularly those living in Washington state, may be part of the defined class. The legal proceedings aim to hold Chime accountable for allegedly incentivizing customers to act as de facto telemarketers, thereby assisting in the transmission of illegal commercial electronic messages.
The Core Allegations: Chime's Referral Program and CEMA Violations
The class action lawsuit specifically targets Chime's popular and lucrative customer referral program. This program is designed to drive new user acquisition by offering monetary incentives to existing members.
- The Incentive Structure: Chime offers a substantial cash bonus—often $100 or more—to an existing customer for successfully referring a friend who signs up and meets certain deposit requirements. The referred friend also typically receives a bonus.
- The Allegation: The lawsuit claims that Chime is not just passively offering a bonus but is actively "initiating or assisting" the transmission of commercial electronic text messages to consumers who have not provided prior consent.
- The Mechanism: The legal argument is that by providing the mechanism and the financial reward, Chime is responsible for the texts sent by its customers, especially when those texts are sent to individuals who never opted-in to receive promotional messages from the company or its representatives.
The plaintiff in the case, often a Washington resident, asserts that they received one or more of these "refer a friend" text messages without their permission, constituting a clear violation of Washington state law. The case seeks to certify a class of all Washington residents who received such a message.
Understanding the Washington Consumer Electronic Mail Act (CEMA)
The legal basis for this lawsuit is the Washington Consumer Electronic Mail Act (RCW 19.190.030), a state-level statute designed to protect consumers from unwanted electronic communications. While the federal TCPA is the most well-known anti-spam law, CEMA is proving to be a powerful tool for litigation against unsolicited texts, especially in the context of referral marketing.
Key differences and provisions of CEMA:
- Scope of Coverage: CEMA covers both commercial electronic mail (email) and commercial electronic text messages.
- Prohibited Conduct: The law prohibits any person from "initiating or assisting in the transmission" of a commercial electronic message to a Washington resident if the sender knows—or should know—that the message includes false or misleading information, or if the message is sent without the recipient's prior express consent.
- The "Assisting" Clause: This is the critical element in the Chime case. The plaintiffs argue that Chime's incentivized referral system constitutes "assisting" in the illegal transmission of the texts, even if Chime itself didn't press the "send" button.
- Statutory Damages: CEMA provides for significant statutory damages. A recipient of a commercial electronic message sent in violation of the law is entitled to recover $500 per message. This per-message penalty is what drives the high stakes of this class action, as a large volume of texts could lead to a multi-million dollar settlement.
The high penalty under CEMA is a significant factor. For context, in a similar case involving unsolicited referral texts, Robinhood Financial, LLC, agreed to pay a $9 million settlement in 2024 to resolve CEMA claims, demonstrating the financial risk for companies operating referral programs in Washington state.
Who Is Eligible for the Chime Text Message Class Action Settlement?
Since the lawsuit is currently in the active litigation or investigation phase, there is no final settlement fund or claim form available yet. However, based on the legal filings and the nature of CEMA claims, the eligibility criteria for the potential class members are specific and geographically limited.
Potential Eligibility Criteria
If the court certifies the class and a settlement is reached, eligibility is expected to be defined as follows:
- Residency Requirement: You must have been a resident of the State of Washington at the time you received the text message. CEMA is a state law, limiting the class to Washington consumers.
- Receipt of Unsolicited Text: You must have received a commercial electronic text message promoting Chime's services—typically a "refer a friend" text—from an existing Chime customer.
- Lack of Prior Consent: You must not have given prior express consent to receive promotional or commercial text messages from the sender or from Chime Financial, Inc.
It is important to note that this lawsuit is distinct from other past legal actions involving Chime, such as the 2019 outage settlement or the 2024 Consumer Financial Protection Bureau (CFPB) order related to money transfer deception allegations.
What Consumers Should Do
For consumers who believe they may have received an unsolicited Chime referral text, especially if they are a Washington resident, the following steps are generally recommended by class action attorneys:
- Document the Text: Preserve the text message itself. Take a screenshot that clearly shows the content of the message, the date and time of receipt, and the phone number it was sent from.
- Record the Sender: Note the identity of the person who sent the text, if known (the Chime customer).
- Do Not Delete: Keep the message on your phone as primary evidence of the alleged violation of the Commercial Electronic Mail Act.
Individuals should monitor official legal news outlets and class action websites for the formal announcement of a settlement or a class certification notice, which will contain the official claim form and deadline.
The Broader Implications for Fintech and Referral Marketing
The Chime unsolicited text messages class action, grounded in CEMA, has significant implications that extend far beyond Chime Financial itself. It serves as a stark warning to the entire fintech and digital banking industry, which heavily relies on incentivized referral programs for rapid growth.
Increased Scrutiny on Referral Programs: The case highlights a crucial legal risk: when a company offers a financial incentive ($100 bonus) for a referral, they may be deemed to have "assisted" in the transmission of the message. This can transform a private communication between friends into a commercial electronic message subject to strict anti-spam laws like CEMA and, in other jurisdictions, the TCPA.
The Rise of State-Level Consumer Protection: While the federal TCPA has been the primary vehicle for text message lawsuits, state laws like CEMA in Washington are proving to be powerful alternatives. This trend means companies must now navigate a patchwork of state-specific regulations, not just federal law, to ensure compliance. Attorneys are actively investigating similar claims in other states with robust consumer protection laws.
Need for Express Consent: The lawsuit reinforces the absolute necessity of obtaining prior express consent from a recipient before sending any commercial text message. Companies must implement robust systems to verify that the referred party has explicitly agreed to receive promotional communications.
Ultimately, the outcome of the Chime CEMA lawsuit will likely set a new precedent for how "refer a friend" programs are structured and executed across the United States. It underscores the potential for massive financial liability when digital marketing strategies, no matter how common, run afoul of specific state consumer protection statutes, especially those carrying a hefty $500 penalty per violation.
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