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State Do Not Call

July 2010 - Call Compliance News

In this issue:

  • The FTC has extended its deadline for enforcing the new red flags rule.
  • An auto warranty company has agreed to pay more than $100,000 in fines to the State of Arkansas.
  • The Ninth Circuit has affirmed dismissal of a California lawsuit against Gap, Inc.

Commentary on this month's news.


The FTC has once again extended its deadline for enforcing the new red flags rule.  The delayed enforcement date is now December 31, 2010 based on the request by members of Congress who are working on legislation to limit the scope of businesses covered by the rule.

A federal judge has issued an injunction halting a business using prerecorded calls to advertise extended auto warranties.  The judge stopped the calls, froze the company’s assets, and appointed a receiver to take control of the company.  Federal Trade Commission v. Asian Pacific Telecom, Inc., et al.  The FTC alleged that the company used fraudulent or deceptive caller ID information and the script falsely claimed that the caller had urgent information regarding the consumer’s auto warranty.

The FTC has obtained a temporary restraining order banning another company offering extended auto warranties to consumers nationwide.  Federal Trade Commission v. Khalilian and The Dolce Group Worldwide, LLC.  The company allegedly created leads by using unsolicited prerecorded messages, now illegal under the Telemarketing Sales Rule.  The FTC also alleged that the defendants falsely alleged a relationship with the consumer when no such prior relationship existed.


An auto warranty company has agreed to pay more than $100,000 in fines, penalties and damages to the State of Arkansas to settle a suit in which Arkansas alleged violation of the national “do-not-call” registry and national and state law regarding prerecorded messages.  Arkansas’ attorney general has filed at least seven cases against companies alleging violations of these laws.

The State of Arkansas has taken a default against a marketer of extended auto warranty products after the attorney general filed suit alleging violation of the TCPA and state law regarding prerecorded calls.  Because the defendant did not respond, the default was entered.  State of Arkansas v. General Warranty Services, Inc.


The Ninth Circuit has affirmed dismissal of a California lawsuit against Gap, Inc. based on a data breach of personal information by that company.  The court ruled that the Plaintiff failed to show that the loss of his personal information harmed him in any way.


The Connecticut Senate has passed a law increasing penalties for violations of its state “do-not-call” law (SB 187).  Telemarketers can now be fined not more than $11,000 for each violation of the state law.


Delaware has enacted House Bill 185 which requires a disclosure for all prerecorded political telephone calls of the full legal name of the individual, party, or other entity making the call and the identity of the entity paying for the call.  The law also imposes a curfew of 8:00 a.m. to 9:00 p.m. for such calls.


An Illinois court has ruled that the TCPA does not require that a state legislature enact enabling legislation to allow TCPA cases in its courts.  Italia Foods, Inc. v. Sun Tours, Inc.  The court ruled that states could “opt-out” of TCPA suits, but in the absence of that action, state courts could hear the federal claim.

An Illinois court has ruled that a business which received a fax could not sue under the TCPA because it had an established business relationship with the sender.  The court ruled that the trial court could not set aside the FCC’s regulation on establishing the exemption in place at the time the fax was sent.  CE Design Limited v. Prism Business Media, Inc.  The court ruled that the Hobbs Act prevented the court from making any ruling setting aside the FCC’s regulation.


A nonprofit organization in the State of Indiana has sued alleging that Indiana’s law banning prerecorded calls without express consent infringes on the group’s right to free speech.

New Jersey
The New Jersey General Assembly is considering a bill (AB 2653) which would establish a “do-not-solicit” list for credit card solicitations.  The list would apply to all forms of solicitation, including mail, telephone, and e-mail.  Very few states have no-solicitation lists applicable only to certain types of sales (e.g. electricity no-solicit list in Texas).

New York

The New York Senate is considering a bill (SB 7082) which would impose additional restrictions on LEC billing.  All services which a business intends to LEC bill must provide customers a clear and conspicuous disclosure of the item being offered and how it will be billed, as well as a toll-free telephone number a customer can use to resolve any billing dispute.

A New York court has ruled that automated calls sent to a consumer in an attempt to collect a debt were not “telephone solicitations” such that the business violated the TCPA when it placed further calls to her after she asked them to stop.  Elizabeth Starkey v. FirstSource Advantage, LLC.  The court also ruled that she could not challenge the FCC’s interpretation that debt collection calls were not telephone solicitations.

A roommate who received a solicitation directed at a person who had requested contact had no standing to allege the call violated the TCPA.  Leyse v. Bank of America.  The court ruled that the plaintiff was not a “called party” because Bank of America placed the call to his roommate.  To the extent the plaintiff picked up the phone he was the unintended recipient of the call.


An Ohio court has dismissed a TCPA claim against a radio station based on a prerecorded telephone call. Leyse v. Clear Channel Broadcasting, Inc.  The FCC confirmed that the radio message encouraging listeners to tune in and win a prize was not telephone solicitation subject to the TCPA restriction.


Wisconsin has proposed a rule allowing residents to add mobile phone numbers to the state “do-not-call” list (Department of Agriculture Trade and Consumer Protection Act Bill Reference No. 21403).  Because mobile numbers can already be included on the national list, this regulation would have little practical effect on compliance.


Wyoming has enacted Senate Bill 57 which prohibits unsolicited telemarketing calls to unpublished cell phone numbers.  Calls to existing customers, or at the express request of the recipient, are exempt.  This bill is effective July 1, 2010.


The authors make every attempt to provide current, accurate information, but Telemarketing ConnectionS® is not intended to be a substitute for legal counsel, and readers should not use it in lieu of obtaining knowledgeable legal, or other professional, counsel expert in the field of commercial telemarketing law. References in Telemarketing ConnectionS® do not constitute endorsement by Copilevitz & Canter, L.L.C. or Telemarketing ConnectionS®. January 1, 2005, Copilevitz & Canter, L.L.C.
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