December 2010 - Call Compliance News
In this issue:
- The Federal Election Commission has ruled that consumers will not be able to directly donate to political campaigns via text message because the cell phone companies’ business practices do not meet current election law guidelines.
- The FTC has opened a business center at www.business.ftc.gov attempting to provide businesses compliance tools with regard to applicable FTC law.
- The United States has alleged that Dish Network violated the TCPA and Telemarketing Sales Rule by calling persons on the national “do-not-call” registry despite the fact that it did not make the calls but rather independent marketing dealers acting on its behalf allegedly made the calls.
Federal Election Commission
The Federal Election Commission has ruled that consumers will not be able to directly donate to political campaigns via text message because the cell phone companies’ business practices do not meet current election law guidelines.
The FEC expressed worries that the billing systems would not adequately separate corporate fund from political contributions.
Federal Trade Commission
At the request of the Federal Trade Commission, a federal court has issued a judgment against a payment processor which allegedly provided services to deceptive telemarketers in the amount of $3.6 million. This is an example of the “accomplice liability” standard found in the Telemarketing Sales Rule applicable if a business knows, has reason to know, or consciously avoids knowing of activity violating the Telemarketing Sales Rule conducted by its business partners and continues to provide services to those partners. FTC v. Your Money Access, LLC.
The FTC has opened a business center at www.business.ftc.gov attempting to provide businesses compliance tools with regard to applicable FTC law.
The FTC has mailed redress checks totaling $1.2 million to consumers who allegedly were defrauded by a debt reduction company. The average amount of payment is about $180 per consumer.
A debt collector will pay a penalty of $1.75 million for allegedly making repeated telephone calls to collect from the wrong person, the wrong amount, or both. This settlement is the second largest civil penalty obtained by the FTC in a debt collection case. United States of America v. Allied Interstate, Inc.
The FTC has approved two settlements alleging violations of the Telemarketing Sales Rule. The first, FTC v. JPM Accelerated Services, Inc. et al. involved prerecorded telephone calls offering to lower consumer credit card interest rates. As you know, most prerecorded calls are illegal and can not be used in cold call situations. The second, FTC v. Debt.com Marketing, LLC et al. involved allegations of violation of the FTC rules on debt settlement although they did not involve the new Telemarketing Sales Rule debt settlement provisions because the alleged violations predate that amendment.
An Arizona federal court has ruled that the FCC exempted debt collection calls from the TCPA. Garo v. Global Credit & Collection Corp. This is only true, however, for some portions of the TCPA.
Another federal court in Arizona (Driesen v. First Revenue Ins., LLC) has ruled that the court could hear the plaintiff’s TCPA claim when it was supplemental to the Fair Debt Collection Practices Act claim. The court ruled that “supplemental jurisdiction” is an exception to the general rule that TCPA claims can only be brought in state court.
A California court has dismissed a case which alleged that the defendant sent unsolicited faxes to businesses in violation of the TCPA. The faxes promoted a leadership award sponsored by the defendant in an application for the award. The court ruled that the faxes were not unsolicited advertisements as that term is defined in the TCPA. N.B. Industries v. Wells Fargo & Co.
An appeals court from the Eleventh Circuit has upheld dismissal of a TCPA claim ruling that such claims can only be made in state court. Mims v. Arrow Financial Services, LLC.
Florida has updated its commercial telephone seller application. The proposed rule requires business entities to file their executed affidavit of exemption prior to offering services in the state and also clarifies that licensees are required to update the Department of material changes in their information within 10 days of the material change. Comments are due on the proposed rule on or before January 1, 2011.
The United States has alleged that Dish Network violated the TCPA and Telemarketing Sales Rule by calling persons on the national “do-not-call” registry despite the fact that it did not make the calls but rather independent marketing dealers acting on its behalf allegedly made the calls. The court has allowed the government to proceed with discovery regarding Dish Network’s activities. The United States has alleged that Dish Network is liable in part based on the accomplice liability standard that it “knew or consciously avoided knowing” that its business partner was violating the TSR.
The federal court in Minnesota has declined to dismiss a consumer’s TCPA debt claims made against a mortgage company attempting to collect a debt. First, the court ruled that it did have “federal question” jurisdiction over the TCPA claim despite the rulings of other courts and that she did not necessarily expressly consent to receive calls at her cell phone number when she allegedly listed it on a mortgage application. Carnes v. Indy Mac Mortgage Services.
The Mississippi House is considering a bill (HB 29) which would add fax solicitations to those communications regulated by the Mississippi “do-not-call” list. The statute, if passed, would be redundant to current federal law which bans unsolicited faxes.
The State of Missouri has obtained a preliminary injunction against Sirius XM Radio alleging that the company called persons on Missouri’s “do-not-call” list in violation of applicable law.
A bill has been proposed in the Missouri Senate (SB 53) which would ban automated telemarketing calls except with the subscriber’s prior express invitation or permission, established business relationship, or if introduced by a live operator. This is a lesser standard than that currently enforced by the FTC through the Telemarketing Sales Rule.
A Wisconsin court has ruled that the defendant’s offer to pay the plaintiff the full measure of its potential damages did not make a potential class action with that plaintiff as lead plaintiff moot. Wilder Chiropractic, Inc. v. Pizza Hut of Southern Wisconsin, Inc. Making such an offer is one tool TCPA defendants use to fight class actions.