September 2012 - Call Compliance News
In this issue:
- The FTC has updated its fees for the national “do-not-call” registry increasing the cost for a single area code to $58, up to an annual charge of $15,962.00 for all area codes. This change is effective October 1, 2012.
- A bill has been proposed in the New York Senate which would eliminate the state’s exemption for businesses incorporated in other state’s or regulated by other state regulators from Telemarketing Registration. SB 7567. The bill would also ban prerecorded messages sent without the written express consent of the recipient.
- A Missouri court has dismissed a TCPA case against a parent corporation which alleged that a subsidiary placed calls in violation of the TCPA and FDCPA to the plaintiff. Velez v. Portfolio Recovery Associates, Inc.
Federal Communications Commission
The Office of Management and Budget has published a request for written comments due on or before August 30th regarding the new regulations implementing the TCPA previously published by the Federal Communications Commission. The new regulations would require written signed consent for predictive dialed or prerecorded calls to cell phones and also implement other restrictions.
Federal Trade Commission
A man charged by the Federal Trade Commission with allegedly running a fake debt collection scheme has been indicted on criminal charges in the Eastern District of California. FTC v. Kirit Patel. Most companies attempt to comply with the Telemarketing Sales Rule and if they don’t, they are subject to civil sanctions. If a company or its owners, however, engage in outright fraud, criminal liability can result.
The FTC has filed suit against Dish Network alleging violations of the Telemarketing Sales Rules’ internal “do-not-call” list restrictions. The suit, filed August 23, 2012, alleges that Dish did not coordinate its internal “do-not-call” list with telemarketers working on its behalf.
The FTC has updated its fees for the national “do-not-call” registry increasing the cost for a single area code to $58, up to an annual charge of $15,962.00 for all area codes. This change is effective October 1, 2012.
The Federal Trade Commission has opposed a class action settlement in a phone bill “cramming” case. Moore v. Verizon Communications. The FTC argues that the proposed class action settlement is not fair, adequate or reasonable. The FTC argues that consumers who do not opt out of the settlement automatically waive any ability to recover their losses under class action law. The Federal Trade Commission has filed a brief opposing federal court finding interpreting the Fair Debt Collection Practices Act.
In Marx v. General Revenue Corporation, the Tenth Circuit ruled that the plaintiff was responsible for defendant’s attorney fees even though she did not sue the company in bad faith. Marx appealed to the Supreme Court and the FTC has supported her appeal. The lower courts awarded costs to the defendant because the courts concluded that the defendant did not violate the FDCPA.
A class action has been dismissed after a court ruled that faxes sent by Wells Fargo contained only a small amount of advertising material. MB Industries v. Wells Fargo & Co. The faxes consisted mostly of information regarding an Asian business leadership award and application for the award and encouragement to apply. The court ruled that an inclusion of Wells Fargo logos and slogans was “de minimis” in comparison to the facts as a whole and did not render it to be an advertisement.
A California court has denied Microsoft Corporation’s Motion to Dismiss a purported class action for lack of standing. Neil Smith v. Microsoft Corporation. Smith alleged that Microsoft sent unauthorized text messages to his cellular telephone without his express consent in violation of the TCPA. Microsoft argued that Smith did not allege that he was charged by his wireless carrier for the text message he received and, therefore, did not have standing to sue. The court disagreed and ruled that the TCPA does not limit protection to instances in which plaintiff is charged for the call he received.
A court has dismissed a purported class action against a company which sent a text message to persons who opted out of a text campaign. Ibey v. Taco Bell Corp. The company complied with Mobile Marketing Associations’ best practices in sending the confirmation message. The court continued that the TCPA does not impose liability for a single confirmatory text message. In this case, the plaintiff had previously expressly consented to be contacted by Taco Bell, then purportedly decided that he no longer wanted to receive text communications. The court ruled that the confirmation text message did not constitute unsolicited telemarketing and did not appear to demonstrate an invasion of privacy.
A Florida court has ruled that a debt collector’s offer to settle a Fair Debt Collection Practices Act and TCPA action did not make the matter moot such that the court should dismiss the case. Benggio v. Professional Recovery Services.
A Louisiana court dismissed a purported class action by a recipient of text messages. Bailey v. Domino’s Pizza LLC. The plaintiff alleged that he did not consent to receive calls, but defendant was able to show that plaintiff had created an account on Domino’s’ website and provided his phone number to receive text advertisements.
A Michigan court has certified a class of recipients of allegedly illegal faxes. American Copper & Brass, Inc. v. Lake City Industrial Products. The defendant hired a company, Business To Business Solutions, which represented that its activities would conform to “faxing guidelines.” The court ruled that the defendant’s offer of judgment did not make the case moot and that state law permitted a TCPA class action.
A Missouri court has dismissed a TCPA case against a parent corporation which alleged that a subsidiary placed calls in violation of the TCPA and FDCPA to the plaintiff. Velez v. Portfolio Recovery Associates, Inc. The court ruled that the parent is not responsible for the actions of the subsidiary corporation under Missouri’s long arm statute or under theories of agency law. The plaintiff made no showing that the subsidiary was a sham corporation and, therefore, the court dismissed the case.
A New Jersey court has dismissed a class action filed against Bank of America based on an allegedly illegal prerecorded telephone call based on the statute of limitations. Leyse v. Bank of America N.A. The court ruled that previous class actions filed by Leyse, which had been dismissed by other jurisdictions did not toll the running of the statute of limitations with regard to a suit in New Jersey.
A bill has been proposed in the New York Senate which would eliminate the state’s exemption for businesses incorporated in other state’s or regulated by other state regulators from Telemarketing Registration. SB 7567. The bill would also ban prerecorded messages sent without the written express consent of the recipient.
Comment: This bill eliminates a very common exemption to New York’s telemarketing registration law. The bill goes into effect in November 2012 and you should review your registration status in the state prior to that date.