Standard Vs. Premium Text Message Charges: A Guide to SMS Fees

Entering SMS sweepstakes is a fast and fun way to win. However, text message sweepstakes may have charges associated with them that online sweepstakes do not, so it's important to know what to watch out for, so you don't end up with unexpected fees.

How can SMS giveaways charge when sweepstakes have to be free to avoid being classified as an illegal lottery? Well, some of those fees aren't charged by the sweepstakes sponsor, but rather by the mobile provider. Others... well, it hasn't yet been proven whether they're legal or not. Read more about the issues below.

There are two types of SMS fees to watch out for before you enter sweepstakes by text: standard and premium text message charges. Here's what you need to know about each type.

What Are Standard Text Message Charges?

If you read the rules of SMS sweepstakes, you'll usually see a line that says something like: "standard text message rates apply." What does that mean?

Standard text message rates are the fees you pay your mobile provider to send or receive SMS messages.

How much you'll pay, or if you need to pay anything at all, depends on your individual service plan. Some common options that your service plan might have include:

• Unlimited Text Messaging: For one flat rate, you can send and receive as many text messages as you like.
• Limited Text Messaging: For your monthly rate, you can send a specific number of text messages at no additional charge. This could be a hundred messages or more than a thousand, depending on your plan. After those texts have been used, you need to pay per text.
• Per-Message Charges: You're charged a fee, usually a few cents, for each text message you send or receive.

If your plan has unlimited text messaging, then you shouldn't have to worry about any Standard Message Fees for entering text sweepstakes. If your plan has limited text messaging, SMS sweepstakes will be free until you hit your limit. And if you have per-message charges, you'll pay whatever your standard rate is, just as you would with any other text message.

Be aware that many SMS sweepstakes make agreeing to receive mobile marketing messages from the sponsor a condition of entering them. If you are paying for every SMS message, these charges can stack up quickly.

If you aren't interested in the messages, be sure to unsubscribe to keep your costs down. You'll probably receive a text message giving you a short code and keyword to use to unsubscribe from promotional texts.

Premium Text Message Charges:

Premium text message charges are fees that the sweepstakes' sponsors charge to contact them by text message. Premium text message fees are charged in addition to the standard messaging fees your mobile provider may apply, and they can be hefty.

Premium text message charges are often used to sell you for things like ringtones or subscriptions. When it comes to sweepstakes, premium fees are usually a one-time charge for entering.

Be careful to always read the rules carefully to find out what the fees will be and carefully decide whether paying them is worthwhile to you. There may be alternate entry methods, such as through a website or by mail, that are free or cost less.

If Sweepstakes Are Free, Why Can Text Sweepstakes Charge Money?

In the United States and many other countries, randomly-drawn sweepstakes can't charge a fee to enter. So how is it legal for text sweepstakes to charge money?

Well, in the case of standard message fees, they aren't. The charge to send and receive texts related to your entry comes from your telephone service provider, not the sweepstakes sponsor. It's similar to paying for a stamp to send in your mail-in sweepstakes entries.

However, it's debatable whether sweepstakes sponsors are allowed to charge premium text message fees, which could qualify as a consideration.

For example, the television game show "Deal or No Deal" was sued in 2008 for running a giveaway that charged entrants premium fees for entering. The case settled and Deal or No Deal agreed to refund the premium text message fees.

However, the settlement means that there is still no clear ruling on the legality of charging premium fees to enter sweepstakes.

In the meantime, alternate entry methods that give you the same chance of winning without paying premium text fees offer a consideration-free way of entering.

Beware of Premium Text Message Charge Scams

While some legitimate sweepstakes do charge premium messaging fees to enter, those fees can also be abused by scammers.

Some scammers run legitimate-looking giveaways with the goal of making money through unreasonably high premium message fees. You might think you're texting a simple trivia question to enter, but in fact, you are paying $4 or more for each text you send or receive. And sometimes, they don't even offer a way to unsubscribe. 

Scamwatch has a breakdown of how premium text message scams work. Be sure to carefully vet any sweepstakes offers you receive and make sure that any giveaway you enter has a full set of rules. Read the rules carefully to find out how much you'll pay to enter.