February 2013 - Call Compliance News
In this issue:
- The FTC has obtained a court order against a company and its owners after alleging that they violated the Telemarketing Sales Rule and committed fraud with regard to purchasing consumers’ timeshare properties. Federal Trade Commission v. National Solutions, LLC, et al. The FTC obtained a judgment of $6.3 million against the defendants.
- A Kansas court has ruled that an insurance company did not have a duty to defend a retailer under an insurance policy for claims of violation of TCPA and state rules regarding telephone calls and text messages. Collective Brands, Inc. v. National Union Fire Insurance Company.
Federal Trade Commission
The FTC has obtained a restraining order halting an allegedly fraudulent debt negotiating company. FTC v. Innovative Wealth Builders, Inc. et al. The FTC alleged that the company made deceptive claims regarding ability to reduce consumer credit card interest rates and misrepresented its refund policy.
The FTC has obtained a court order against a company and its owners after alleging that they violated the Telemarketing Sales Rule and committed fraud with regard to purchasing consumers’ timeshare properties. Federal Trade Commission v. National Solutions, LLC, et al. The FTC obtained a judgment of $6.3 million against the defendants.
The FTC has filed suit seeking a temporary restraining order against a company which placed charges on consumers’ telephone bills. Federal Trade Commission v. American eVoice Limited, et al. The FTC alleged that the charges appeared without the consent of consumers and violated the FTC Act.
The FTC, New York, and Florida charged a company and its owners with violation of the FTC Act and Telemarketing Sales Rule by misrepresenting their home-based business services. The calls from the company allegedly did not disclose promptly that their purpose was to sell something in violation of the Telemarketing Sales Rule. Federal Trade Commission, et al. v. The Tax Club, Inc., et al.
More than 700 people entered the FTC’s robocall challenge which sought private help for a solution to block illegal prerecorded calls. Winners are expected to be announced in April 2013.
Two California companies and their principles have been banned from marketing loan debt relief to consumers pursuant to a settlement with the Commission. FTC v. Nafso Vlm, Inc., et al. The defendants promised to reduce consumer automobile loan payments and instructed them to stop making payments on their auto loans.
The FTC is distributing $7.4 million to consumers as a result of a lawsuit against a marketer of “platinum” credit cards. Federal Trade Commission v. Apogee One Enterprises, LLC., et al. Defendants are permanently banned from telemarketing and selling any type of credit card product or service.
Revisions to Arizona’s Telephone Solicitation Statute recently became effective and specifically regulate sellers of business-opportunity related services. Sellers of business opportunities, in addition to registration bonding requirements, must now comply with a written contract and disclosure requirement before money can be accepted from a consumer (HB 2825).
A bill has been added to the Arizona House which would specifically add political organizations to those entities entitled to a limited exemption from telemarketing registration in the state (HB 2457).
A California appellate court has certified a class of consumers who allege a debt collector called their cellular telephone numbers illegally. Meyer v. Portfolio Recovery Associates, LLC. The debt collector allegedly obtained consumer telephone numbers via skip tracing.
Comment: The TCPA requires prerecorded or predictive dialed calls to cell phones be placed only with the express consent of the recipient. The FCC defined express consent as obtaining that number from that consumer, and specifically rejected caller identification capture or obtaining a number from a third party as evidence of express consent.
A trial court judge has denied certification for a purported class of consumers alleging “cramming” violations on their phone bills. Corea v. ILD Telecommunications, Inc. et al. The court ruled that plaintiffs could not show the common policy or practice of the company that would affect the class as a whole. The court ruled that the company’s verification procedure is such that each plaintiff would have an individualized question regarding authorization for the charges or not thus defeating the class.
An Illinois court has rejected a class alleging illegal faxes after finding plaintiffs’ counsel was inadequate. Savanna Group, Inc. v. Trynex, Inc. The court allowed the attorneys an additional chance to show their abilities and adequacy.
Comment: This case involves the same attorneys mentioned last month in the Wisconsin suit and reached a different conclusion.
A Kansas court has ruled that an insurance company did not have a duty to defend a retailer under an insurance policy for claims of violation of TCPA and state rules regarding telephone calls and text messages. Collective Brands, Inc. v. National Union Fire Insurance Company.
A bankruptcy court has approved a plan to dissolve a company which sold vehicle service contracts to consumers. In re: US Fidelis, Inc. The plan established a $14.1 million fund to pay the claims, including TCPA claims by consumers who purchased service contracts from the company.
The Missouri Attorney General has filed suit against a California home security business alleging violation of the Missouri state “no-call” list. Coster v. Maximum Security Alarm, Inc.
Comment: Missouri actively enforces its “do-not-call” list which has a different established business relationship exemption than federal standard and contains different numbers. If you call into Missouri, you need to access both lists.
New Jersey has allowed a class action to continue based on allegedly illegal fax advertisements sent by a legal directory company to a law firm. Landsman & Funk PC v. Skinder-Strauss Associates. The court noted that it seemed unlikely that Congress intended the TCPA to be used for class actions. The court applied the federal law to the federal claim and allowed the case to continue.
A bill has been proposed in the North Dakota Senate (SB 2260) which would exempt text messages from disclosures required in telephone solicitations.