August-September 2011 - Call Compliance News
In this issue:
- The FTC has settled charges against a debt relief company and its principals alleging violations of the Telemarketing Sales Rule provisions against charging fees for debt relief services before those services are provided.
- An Illinois court has refused to dismiss a suit against ADT which argued that it was not responsible for calls placed on its behalf by vendors.
- An appeals court in New Jersey has dismissed a class action of businesses which allegedly received unsolicited facsimiles in violation of the TCPA. The court ruled that $500 per fax was sufficient redress and a class action was not necessary.
Federal Trade Commission
The FTC has settled charges against a debt relief company and its principals alleging violations of the Telemarketing Sales Rule provisions against charging fees for debt relief services before those services are provided. Federal Trade Commission v. Debt Relief, USA, et al. Consumers have received $3.7 million in refunds from the bankrupt company.
The FTC has settled three cases alleging that credit report resellers failed to take reasonable steps to safeguard sensitive personal financial information from improper disclosure (In the Matter of SettlementOne Credit Corporation).
Comment: Federal and state law provide standards for protection of sensitive consumer financial information and notification in the event of breach of those standards.
A court has refused to dismiss a suit against Dish Network brought by the FTC. United States v. Dish Network. Plaintiffs alleged that the defendant caused its marketing dealers to engage in violations of the Telemarketing Sales Rule. Dish Network unsuccessfully argued that all claims seeking to impose liability on it for the actions of unidentified third parties (the marketers) should be dismissed.
A California court has been assigned to hear a class action against Jiffy Lube. Plaintiffs allege that Jiffy Lube and its franchisee sent illegal text messages in violation of the TCPA. In re Jiffy Lube International, Inc.
An Illinois court has refused to dismiss a suit against ADT which argued that it was not responsible for calls placed on its behalf by vendors. Desai v. ADT Security Services, Inc.
Comment: It is clear that businesses must control their vendors’ activities as the seller is likely the deep pocket and a target for any TCPA action, individual or class.
A TCPA defendant attempted to offer a plaintiff judgment thus making any potential class moot. Geismann v. Allscripts Healthcare Solutions. The court denied this motion and allowed the class action to continue.
An Illinois court has affirmed that the TCPA applies to predictive dialers used in debt collection. Griffith v. Consumer Portfolio Serv. The plaintiffs alleged that they received unauthorized telephone calls and text messages on their cellular telephones. The court affirmed that these calls would need to comply with the FCC’s rules on automatic telephone dialing systems.
An Illinois court has dismissed a purported class action against a casino for alleged violations of the TCPA. Vigs v. S. Illinois Riverboat/Casino Cruises, Inc. The plaintiff did not have a cell phone and therefore could not make claims that the defendant violated the TCPA’s provision on calls to cell phones.
Indiana has announced a settlement with a health insurer alleging failure to promptly notify the attorney general of a data breach as required by Indiana’s Data Breach Act. The insurer, WellPoint, will pay a fine of $100,000 and provide additional identity theft prevention assistance to consumers affected by the breach.
A trial court has granted a union summary judgment with regard to a TCPA claim by a hospital. Ashland Hospital Corp. v. IBEW Local 575. The Union placed prerecorded calls to citizens in the county where the hospital was located protesting the hospital’s employment decisions. Although individuals could be connected to the hospital based on the prerecorded call, the court ruled that the calls did not violate the TCPA because the citizen connected the call, not the Union.
A Michigan court has ruled that internet telephone services do not constitute a “paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call” such that the TCPA’s ATDS rule would ban calls to internet telephone numbers absent the express consent of the recipient. Daniel v. West Asset Management, Inc.
The Michigan Senate is considering a bill (SB 565) which would explicitly add text messages to the state’s unsolicited commercial e-mail protection law ending unsolicited commercial text messages unless there is a preexisting business relationship between the recipient and the sender. The TCPA already bans most text messages in that circumstance.
A federal appeals court has ruled that the unintended recipient of telephone calls did not have a cause of action under the TCPA against the caller because the caller intended to contact the persons at that telephone number who did have an established business relationship with the creditor. Meadows v. Franklin Collection Services (11th Cir. 2011).
Comment: There are cases on both sides of the “unintended recipient” argument, i.e. whether the unintended recipient (or class of unintended recipients) have a cause of action under the TCPA even if the caller intended to call someone with whom it did have an established business relationship.
The Missouri Attorney General has obtained a temporary restraining order against a Pennsylvania based telemarketing company alleging that the company violated Missouri’s “do-not-call” list law. The Attorney General filed suit against Internet Technology Partnerships, Inc. and Jesse Levine.
Missouri’s Attorney General has also obtained a temporary restraining against C. Michael Exteriors, Inc. and its owner, William Bergmann, for calls involving windows and siding.
An appeals court has dismissed a class action of businesses which allegedly received unsolicited facsimiles in violation of the TCPA. Local Baking Products, Inc. v. Kosher Bagel Munch, Inc. The trial court ruled that a class action was not the best way to resolve the suit and the appellate court agreed. The court ruled that $500 per fax was sufficient redress and a class action was not necessary.
A debt collector has appealed a district court ruling granting plaintiff damages under the TCPA for allegedly illegal prerecorded debt collection calls. First National Collection Bureau, Inc. v. Walker. The debt collector claimed that it did not willfully or knowingly violate the TCPA, but the court denied this claim. The trial court had awarded $147,000 to the plaintiff, and the appeals court affirmed that ruling.
A Wisconsin court has affirmed the statute of limitations under the TCPA is four years. Sawyer v. Atlas Heating.