November 2006 - Call Compliance News
The FTC has extended the comment period on its ban on most prerecorded telephone calls through December 18, 2006. If you have not reviewed the FTC’s proposal it can be found at:
http://www.ftc.gov/os/2006/10/R411001telemarketingruleFRN.pdf. Please contact me if you want assistance drafting comments.
The FTC has announced settlement with a software company regarding charges the company did not take reasonable security measures to protect sensitive consumer data in violation of statements made on the company’s website. A security failure allowed hackers to access sensitive credit card information for thousands of consumers. The company agreed to audits by an independent third party every other year for a period of ten years.
Two Canadian individuals and their companies have settled charges that they violated the Telemarketing Sales Rule in a lottery winning scheme primarily targeted at elderly U.S. consumers.
The FTC has settled charges against a company that allegedly violated the CAN-SPAM Act for failure to honor unsubscribe requests from recipients of commercial e-mail. The settlement involved a $50,000 civil penalty.
Two mortgage companies have settled charges that they illegally marketed services to persons whose names were contained on the national “do-not-call” registry and failed to pay the access fee for numbers listed on the registry. This settlement involved a permanent injunction of future Telemarketing Sales Rule violations.
A bill has been proposed in the U.S. Congress to amend the FTC’s Telemarketing and Consumer Fraud and Abuse Prevention Act to prohibit calls between the hours of 5:00 and 7:00 p.m. If passed, this law could be extremely damaging to the industry. No state or federal law has opted for a curfew specifically blocking these hours, although several states have considered similar bills in the past.
Alaska has repealed its “Black Dot” state “do-not-call” registry. Persons who wish to not be contacted by telemarketers are recommended to join the federal “do-not-call” list. The list is repealed effective immediately.
An appellate court has affirmed a trial court decision that TCPA claims are not assignable. This ruling is limited to Colorado at this time, but if adopted in other states could be a very important weapon against abusive TCPA plaintiffs.
A national wireless company has sued several telemarketers alleging violation of the TCPA. The wireless company did not receive telephone calls, but alleges that it was damaged and has a private right of action under the TCPA. This is extremely questionable given that the TCPA was intended to give the recipients of the calls (i.e. consumers) causes of action against illegal telemarketing. These cases are likely modeled after similar cases filed by other wireless telephone companies in other jurisdictions and suits filed by internet providers against spammers for alleged illegal unsolicited e-mail messages.
A United States district court has ruled that a plaintiff can not allege “conversion” in a TCPA claim for unsolicited faxes. The plaintiff had argued that the sender of the fax should be liable for the toner and paper caused by an unsolicited fax as well as TCPA liability. The judge rejected this sort of “adding on” of other claims.
A federal court has upheld Indiana’s ban on prerecorded political calls (FreeEats.com v. State of Indiana). The federal judge ruled that the Indiana statute could apply to interstate calls despite the fact that these calls were legal under federal law. Indiana is one of only a handful of states that has restrictions on prerecorded political calls.
The Public Service Commission has amended the Louisiana “do-not-call” rule to make a bond optional upon showing of “financial responsibility” by the registrant. I think it likely that the Public Service Commission will be reasonable regarding this requirement. If you have the Louisiana “do-not-call” list, you should move for permission from the Public Service Commission to cancel your bond. Please contact me if I can be of assistance.
An appellate court in Ohio has ruled in favor of a TCPA plaintiff who did not register his telephone numbers on the national “do-not-call” list. State ex rel. Charvat v. Frye. There is no requirement in the TCPA that a consumer register his or her numbers on the “do-not-call” list prior to suing under the TCPA. If your calls are illegal under the TCPA, “scrubbing” against the list is no defense.
Missouri’s attorney general has proposed legislation which would bar political prerecorded telephone calls. As set forth above, if properly crafted, such legislation would likely be held constitutional. The legislation is obviously a reaction to deceptive and abusive messages sent in the past campaign. Federal law requires that these messages promptly disclose the identity of the caller and include a telephone number before the end of the call. Several examples of automated messages in the past campaign did not contain these disclosures and were otherwise deceptive and/or fraudulent. If your company sends prerecorded messages, you should be aware that the FTC and other agencies will likely hold you responsible for the content of messages sent by your clients if you know, have reason to know, or consciously avoid knowing of illegality.
An appeal court has ruled that a Las Vegas ordinance barring solicitation and placing tables in a downtown area was unconstitutional. The court ruled that the solicitation ban was not content neutral because it allowed some handbills and banned others.
The New Jersey General Assembly is considering a bill which would create a credit card do-not-solicit list. The bill would also prohibit mailing functional credit cards to vulnerable consumers or senior citizens.
A bill has been introduced in the Pennsylvania House which would add political donation solicitation calls to the definition of “telemarketing” thus potentially requiring registration for telemarketers who conduct such campaigns.